# Getting a Financial Advisor



## rd_aaron (Jun 24, 2011)

My fiancée wants to start to take money off the top of her paycheck every month and put it into some sort of investment. I have been doing the self-directed thing for about a year now, but I'm not sure what to do for her. She is not interested in managing her own investments. She would like the money to come off the top and go into something and not have to think about it. For now, all of her money will go into a TFSA.

The way I see it, she has a few options:

A) Automatic deposits into a HISA or GICs (I don't want to do this as you lose against inflation)

B) Get a financial advisor at her bank (I don't want to do this as you only have access to the bank's products AFAIK, and the fees on mutual funds are too high for my liking)

C) Get an independent fee-based advisor (I don't mind this idea, but your returns are lessened by the fee, and you have little control of your investments)

D) Allow me to control her investments.. likely a diversified couch potato strategy (Problem is if I'm buying every month, then I'm losing money on commissions every month. Plus it might end up being a source of tension if the investments go south)


I'd like to do either option C or D. I'm thinking C might be a better idea as she can have an automatic deposit coming out of her account every month and she won't get charged commission every month. However, I'm not sure how to find a good advisor, and I'm not totally confident in their abilities. 

I'd appreciate any comments or suggestions.


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## Jesse (Jan 21, 2012)

Have her open the TFSA at TD and build her portfolio at TD using the E-Series funds. They are index funds (as opposed to ETF's), so the MER is higher, but you don't pay fees for monthly contributions.

See Global Couch Potato option #2 here:

http://canadiancouchpotato.com/model-portfolios/

Set it and forget it.


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## humble_pie (Jun 7, 2009)

oh no, not another controlling partner.

the question is, why isn't she interested.

something happens to you either now or later & she'll be unprepared & overwhelmed.

the very best thing you could do for a person whom you genuinely loved would be to encourage her to gradually take up her own responsibilities. One is them is being self-supporting.

issues like this one point up why financial management should be taught in the high schools.


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## rd_aaron (Jun 24, 2011)

humble_pie said:


> oh no, not another controlling partner.
> 
> the question is, why isn't she interested.
> 
> ...


Whoa, jump to conclusions much?

Why does it matter that she would rather have someone else handle the details for her? I could do my own taxes, but I might also prefer to have an accountant do them for me as they are better at it than I am.

She'll be involved in the process right from the start. I am not forcing anything on her, just trying to show her the best options and get opinions and suggestions from forum members.


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## rd_aaron (Jun 24, 2011)

Jesse said:


> Have her open the TFSA at TD and build her portfolio at TD using the E-Series funds. They are index funds (as opposed to ETF's), so the MER is higher, but you don't pay fees for monthly contributions.
> 
> See Global Couch Potato option #2 here:
> 
> ...


So from what I'm reading, she would set up a TDW account, and set up monthly contributions, and the only fees would be the 0.43% MER (in the case of option 2)? 

Can you set up TDW to automatically contribute 20% of the monthly contribution to Canadian Equities fund, 40% to Canadian bonds fund, etc.?


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## Four Pillars (Apr 5, 2009)

Another option is the ING Streewise funds. They are more expensive (1%/yr), but are much easier to set up than TD e-funds and I think they rebalance automatically.


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## humble_pie (Jun 7, 2009)

i am so *not* jumping to conclusions.

this is standard oppressor language. They (first nations, afro-american slaves, women before the vote in north america) not only have no clue what's good for em but, bless their cotton-pickin little hearts, they actually like it that way.

sigh. Poor us. We have no choice but to tell the infants what to do. It's all such a burden. But then, we the powerful are so noble about it.

ps imho you would be enormously enlightened if you would learn how to do your own taxes. There's nothing like it for teaching how the deductions work.


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## rd_aaron (Jun 24, 2011)

humble_pie said:


> i am so *not* jumping to conclusions.
> 
> this is standard oppressor language. They (first nations, afro-american slaves, women before the vote in north america) not only have no clue what's good for em but, bless their cotton-pickin little hearts, they actually like it that way.
> 
> ...


Calling me a "controlling partner" is jumping to conclusions. I guess you know our lives based on one post though...

My fiancee WANTS me to help her figure out a plan. SHE is the one who asked ME. I never told her to do anything, nor plan to.

Now, I would like to get back to discussing what options she has (like the other posters have), rather than have you judge me.


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## humble_pie (Jun 7, 2009)

i know that's what you said. We are far, far past that point.

independence including financial independence is in the charter of rights. Financial independence is crucial to the survival of every contemporary woman. The majority of marriages today don't even last. There are precious few cases of women in this country today who would, deliberately & consciously, choose a dependent or fettered state.

as i mentioned in my first post, if you genuinely & sincerely loved another person, you would make sure that he or she learned to grow & flourish as a separate independent person. This is what we teach our children. Heaven help the parent who says, You don't know how to ride a bicycle, so there's no point your bothering to learn.

even when our kids fall off their bikes & come crying with scraped knees, we don't say to them Sweetie stop trying to do this, Just stay indoors, all by yourself, instead.

it would be a different story if your fiancée were merely enlisting your goodhearted coaching. In that case, she could come to this forum herself, as countless women do, & discuss her own options for herself. A great deal of excellent coaching goes on in this forum.

your story - that she *wants* you to discuss her intimate financial life on a public message forum - has a bizarre edge to it, imho. In general, i am doubtful about parties who come to this forum claiming to be "looking after" or "managing" the personal finances of elderly, maimed or dependent persons.

there are certainly exceptions, and some genuine caretakers in this forum have done magnificent jobs looking after their wards. However i do not get the impression from your ice-cold messages that you are one of these.


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## andrewf (Mar 1, 2010)

Make sure your fiancee also knows how to service her car and how to mow the lawn. Independence, you know.

The assets are in her name. She has ultimate control. If dear hubby gets hit by a bus or they have a nasty split, she can go to any bank and let them sort through things for her (easy, if something like TD e-series is used). By all means she should educate herself, but it is her prerogative. You regularly attack posters for real or perceived sexism, HP, and I for one think this creates a poisonous atmosphere. Acrimonious accusations first, questions never.


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## Koala (Jan 27, 2012)

You haven't really provided much information regarding what she would like to do other than automatic payments and a fairly hands off approach. For some situations, HISA and GICs are the best approach.

I don't know enough to say if a fee-based advisor is the best for her situation. I don't think it's bad if you maintain her investments with a couch potato strategy as long as she knows what's going on, likes the strategy overall and knows what to do with them even if she isn't the one who ends up handling them.

For me, going to an advisor at the bank is a good first step. It gets a discussion going, I can find out what's available (or at least some of the options), and I start thinking about what is and isn't right for me. Seeing an advisor at the bank doesn't require any decisions to actually be made at that time, so it could be free.


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## PuckiTwo (Oct 26, 2011)

> *originally quoted by humble pie:*
> the question is, why isn't she interested.
> something happens to you either now or later & she'll be unprepared & overwhelmed.
> the very best thing you could do for a person whom you genuinely loved would be to encourage her to gradually take up her own responsibilities. One is them is being self-supporting.
> issues like this one point up why financial management should be taught in the high schools.


Without getting into further discussions, this is very well said. Children as well as partners should learn and know what happens to their money be it pocket money or investments. Not knowing leaves you clueless if hit with reality.


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## MoneyGal (Apr 24, 2009)

You haven't said whether this is a registered or non-registered account - which doesn't matter much except it might be useful for us to know. 

The problem with a fee-based advisor is that you are going to erase any fee advantage by paying the fees. You aren't going to get a fee-based advisor who manages assets but you might get someone to help construct a plan for her for a few hundred $$. 

But if she isn't really interested in finance, she may not value the $$ spent, and you haven't demonstrated that you've added value by spending those $$ (that usually comes by showing how much worse off she'd have been with an alternate plan...tough to do if the assets fall in value). 

I used to work with a nutrition coach for a while and she divided eating and health habits into different levels. Level 1 habits are "the basics" - are you drinking enough water? Getting enough sleep? etc. She had Level 2 and 3 habits as well. 

The problem is (she said) that many people focus on the Level 3 habits - are you getting the right balance of macronutrients? Are you taking the right supplements? - when most of the difference you can make comes from taking basic habits and implementing them over time. 

In the case of your fiance, getting an account established and getting the habit of making regular contributions are HUGE things. HUGE! You can look at different investing strategies later. Maybe after six months or a year, when she has something a little more substantial at stake. Maybe after a few years. If she develops good saving habits, this is more than half the battle. It might not be as exciting as developing investing strategies but it forms the foundation of financial success.


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## rd_aaron (Jun 24, 2011)

andrewf said:


> Make sure your fiancee also knows how to service her car and how to mow the lawn. Independence, you know.
> 
> The assets are in her name. She has ultimate control. If dear hubby gets hit by a bus or they have a nasty split, she can go to any bank and let them sort through things for her (easy, if something like TD e-series is used). By all means she should educate herself, but it is her prerogative. You regularly attack posters for real or perceived sexism, HP, and I for one think this creates a poisonous atmosphere. Acrimonious accusations first, questions never.


Thank you. You articulated it much better than I would have.


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## rd_aaron (Jun 24, 2011)

Koala said:


> You haven't really provided much information regarding what she would like to do other than automatic payments and a fairly hands off approach. For some situations, HISA and GICs are the best approach.
> 
> I don't know enough to say if a fee-based advisor is the best for her situation. I don't think it's bad if you maintain her investments with a couch potato strategy as long as she knows what's going on, likes the strategy overall and knows what to do with them even if she isn't the one who ends up handling them.
> 
> For me, going to an advisor at the bank is a good first step. It gets a discussion going, I can find out what's available (or at least some of the options), and I start thinking about what is and isn't right for me. Seeing an advisor at the bank doesn't require any decisions to actually be made at that time, so it could be free.


We're pretty new to the investing world (we're only 24), and since I've been reading the forum I've been giving the impression that mutual funds have too high of fees. Looking at the couch potato strategy Jesse pointed out though, the MER is only 0.43% which is likely lower than a fee-based advisor. 

I realize the use of HISAs and GICs, but I read another financial blog that basically says not to use them. Everyone has different opinions and risk tolerance though, so they definitely have their place.



MoneyGal said:


> You haven't said whether this is a registered or non-registered account - which doesn't matter much except it might be useful for us to know.
> 
> The problem with a fee-based advisor is that you are going to erase any fee advantage by paying the fees. You aren't going to get a fee-based advisor who manages assets but you might get someone to help construct a plan for her for a few hundred $$.
> 
> ...


That's true. This happens to be my biggest problem too. If I don't pay myself first, I end up finding something to spend it on.

PS - She'll be opening and contributing to a TFSA.


Thanks for the advice!


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## humble_pie (Jun 7, 2009)

i'll stick to my knitting.

the op is very clear that he prefers either a fee-based advisor, which he apparently believes will be ongoing, or else he wants to "control her investments" himself.

_Allow me to control her investments.. likely a diversified couch potato strategy (Problem is if I'm buying every month, then I'm losing money on commissions every month ...)_

notice the use of the first person singular here. These are not "her" investments nor are they commissions that "she" is paying. These are now his investments & now it is "I'm buying every month" & "I'm losing money on commissions."

gosh. I find myself wondering if the particular young lady is aware that her betrothed is already carving up the details of her future earned paycheques here in a public message forum.

interestingly, there are some older couples here in this forum where the husband is preparing for retirement with the utmost sensitivity & generosity, thoughtfully drawing his wife into the details of their co-created partnering plan.


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## Four Pillars (Apr 5, 2009)

humble_pie said:


> However i do not get the impression from your ice-cold messages that you are one of these.


Slow day at work today Humble?


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## humble_pie (Jun 7, 2009)

oh my, what kind of crack is that pillars. One might as well ask why you are never at home minding your own blog but hang here instead.

super-controlling partners, like super-controlling bosses, are worrisome imho.


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## Koala (Jan 27, 2012)

I am in a slightly similar situation to you two. I am fairly young, and have been married less than a year. I am still quite early in the learning process about investing.

My advice that I would offer is don't start off by taking control of her investments (even if that's what she would like). I think it is important to have a third party discuss investment options, risk, etc. with her. It could be someone at the bank who primarily sells mutual funds, a fee based advisor or someone else with reasonable investing knowledge. You can continue the conversation afterwards, and then set things up for her if that's what she wants. I think it's a good idea to have one person offer suggestions and advice who doesn't have an emotional investment before you take control of her money.


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## Eclectic12 (Oct 20, 2010)

rd_aaron said:


> My fiancée wants to start to take money off the top of her paycheck every month and put it into some sort of investment. I have been doing the self-directed thing for about a year now, but I'm not sure what to do for her. She is not interested in managing her own investments. She would like the money to come off the top and go into something and not have to think about it. For now, all of her money will go into a TFSA.
> 
> The way I see it, she has a few options:
> 
> ...


Being a DIY type for most of my investments, I haven't checked recently but there used to be a C-2) option where the fee-based advisor helps give an intro to investing and helps map out the plan. It's then up to the client to implement the plan. This would also be lessened by the fee but maintains the control of the investments.

Also - depending on what is meant by "She is not interested in managing her own investments", there might be a D-2) option. For this one, learn together about the diversified coach potato, including the tasks through the year. If she sees that it's a manageable amount of work, with a few investment choices to make - she change her mind about managing it.


Just a couple of thoughts ...


Cheers


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## MoneyGal (Apr 24, 2009)

The "C-2 option" is actually the only fee-based option open at this point - using a fee-based advisor who manages assets usually requires a minimum account size of at least six figures. (For reasons that are obvious if you think about it.)


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## OntFA (May 19, 2009)

MoneyGal made the great point that your spouse should not try to dive too deeply into investing. My interpretation of that is to make regular contributions (something she's already wanting to do) into a single well-diversified low-cost balanced fund.

If your situation is fairly straightforward, you really won't need a whole bunch of advice to get started. RBC Monthly Income or TD Monthly Income are both really good options if you want to start with a bank.

Once you get at least $10k, you can then look at Steadyhand Investments, which just came out with well-priced a balanced fund. Tough to go wrong with these kinds of investments. I always start novice clients off in a balanced fund (unless I see a real need for greater customization).

And I read an article recently - can't recall where - that made the case for holding a good simple balanced fund for a much larger sum that most people tend to use them for - i.e. $100k+.


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## kcowan (Jul 1, 2010)

rd_aaron said:


> So from what I'm reading, she would set up a TDW account, and set up monthly contributions, and the only fees would be the 0.43% MER (in the case of option 2)?
> 
> Can you set up TDW to automatically contribute 20% of the monthly contribution to Canadian Equities fund, 40% to Canadian bonds fund, etc.?


Yes. In fact you can start at a TD branch, open a TFSA and start contributing right away into e-funds. Leave the discount broker overhead for when you have a significant amount saved. The bank will help you with building up the money in a HISA and then doing periodic purchases. You have obviously started down the road of educating yourself and want to take your SO along with you. 

At 24, you are ahead of 99% of the population. Welcome to CMF and good luck.


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## larry81 (Nov 22, 2010)

Here what i did for my wife:

1. Open ING Streetwise account
2. Setup fixed Weekly contribution of X

Thats all !


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## rd_aaron (Jun 24, 2011)

OntFA said:


> MoneyGal made the great point that your spouse should not try to dive too deeply into investing. My interpretation of that is to make regular contributions (something she's already wanting to do) into a single well-diversified low-cost balanced fund.
> 
> If your situation is fairly straightforward, you really won't need a whole bunch of advice to get started. RBC Monthly Income or TD Monthly Income are both really good options if you want to start with a bank.
> 
> ...


Mutual funds always seem like their fees are too high, but looking at the big bank's monthly income funds, they perform pretty well, even after the fees. These seem like a great option.

Unfortunately the RBC one isn't available for registered accounts so it might be out. What do you think of the CIBC or BMO monthly income funds?

Also, I noticed BMO offers a monthly income ETF. It's only been around since January of 2011, but it seems very diversified and it's annual management fee is only 0.55%.


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## londoncalling (Sep 17, 2011)

My wife has no interest in investing either. She has however taken a huge interest into saving. Currently she funds both her RRSP and TFSA every paycheck. Both those accounts are in HISA and GICs. Yes it's true that she may not be beating inflation or making substantial gains with these vehicles. However, it has enabled us to create an emergency fund (TFSA in HISA) and it is money we would have spent on other things. Over time she may develop an interest in investing. I am willing to wait till she expresses interest in other investment vehicles. Meanwhile, I continue to grow our retirement fund with an increasingly diversified dividend protfolio. Should I cease to exist unexpectedly, it will then be up to her to do what she wants with my portfolio. She is however, well aware of the cost effect of MERs on retirement savings and would not be duped by a mutual fund salesperson. Most likely, she would take a couch potato approach like TD E-series etc Like others have mentioned throughout this forum greater savings come from paying off debt, living below your means and general saving than from investment returns when time and effort is considered. For me investing is part hobby part financial planning. However, on a cost basis, currently, it may be more profitable to work more hours or get a 3rd job than by investing. But I view this time spent as an enjoyable education. I would rather learn all I can now then wait till I retire and try to pick up the knowledge then. Good luck to you whatever you both decide. Just remember that if you push someone into doing something they don't want to do and it goes south they will never let you forget it. Take small steps as you have lots of time.

Cheers and welcome to the forum


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## the-royal-mail (Dec 11, 2009)

That's a great story, london. Glad to hear about someone more focused on saving rather than on investing. I shake my head at the number of threads we read on here from people who want investment knowledge, yet can't even save money for that or other important household needs. Save first, invest later. Knowing how to save and manage money are two critical skills lacking by most.


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## londoncalling (Sep 17, 2011)

Thanks TRM. If it wasn't for my wife and you I would still be without an emergency fund.


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