# Retiree feels duped by bank advisors. Only got 3% last 6 years.



## MrsPartridge (May 15, 2016)

With the size portfolio this retiree had, he should have spent some time and money on investment books. Even reading Moneysense would have led him away from bank advisors and towards couch potato. He says he paid 30K over the last 6 years but I think with 1 million invested at 2.5% or so MER, it could be more like 30,000 annually, no?

http://www.cbc.ca/news/canada/british-columbia/bank-s-deceptive-titles-put-investments-at-risk-1.4044702


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## ian (Jun 18, 2016)

No surprise.

It happens because people let it happen. For some reason they trust banks. I have never been certain why. Investing does not have to be complex. With just a little reading or work you can get the basics. Alas, many people spend more time investigating what TV or washing machine to buy than they do looking after their investments/retirement money.

That is where the banks come in. They take advantage of that and pretend that they have expertise. They don't. As the article says, they do not advise, they sell. And they sell what they are told to, what gives them the most credit, the most bonus.

Trust our banks? Who's kidding whom? The bank looks after the bank, not the customer.


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## Beaver101 (Nov 14, 2011)

ian said:


> No surprise.
> 
> It happens because people let it happen. For some reason they trust banks. I have never been certain why. Investing does not have to be complex. With just a little reading or work you can get the basics. Alas, many people spend more time investigating what TV or washing machine to buy than they do looking after their investments/retirement money.
> 
> ...


 ... but they're titled as "financial advisors", supposedly to "advise" but then there is that now revealed distinction of being an "advisor" who doesn't "advise" ... kind of misleading, don't you think? Or does a layman have to go to the regulators' website and search up all these fancy titles to determine who can ctually can advise and who can't? Moreover, shouldn't the bank be in a position of "trust"? At least, Canadian banks that Canadians are so proud of - or shareholders, I should say. 

In this case, I'm surprised that there is no mention of a KYC form being signed prior to selling him the mutual funds.


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## ian (Jun 18, 2016)

Visit some retail stores, car dealerships. They have lots of sales advisors and many are called exactly that. That still does not preclude folks from doing a little research on their own.

Even reading the documentation from the bank with an eye to the MER's etc. would help. The banks must rub their hands in glee during RSP season. All those people focussed on getting a tax refund with little or no attention paid to the product or the return. Banks have a great business. Take your money, earn 3 percent MER on many products. You may or may not make as much or even loose money...the bank gets their 3 points off the top no matter what. It is a great business model. It is why I like bank stocks.


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## DollaWine (Aug 4, 2015)

It's your own money... and a lot of money at that. Take a few days/weeks to learn how to manage it or at least understand what is being sold to you before you decide to sign up. My pity rating for this is pretty low. He's a grown man. It's his responsibility to understand what he's signing up for.


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## ian (Jun 18, 2016)

Me too. Especially since he went along with this gag for six years. Go figure. 

The upside to the story is that he woke up, smelled the roses (or perhaps the fertilizer) and make his experience public so that others may wake up.

The only person who cares about your money is you.


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## Eclectic12 (Oct 20, 2010)

ian said:


> No surprise.
> 
> It happens because people let it happen. For some reason they trust banks. I have never been certain why. Investing does not have to be complex. With just a little reading or work you can get the basics. Alas, many people spend more time investigating what TV or washing machine to buy than they do looking after their investments/retirement money.


Agreed ... people seem to treat finances as something that can't be learned versus say car repairs. I have never understood why as people learn some complex stuff as part of their hobby.


Cheers


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## redsgomarching (Mar 6, 2016)

i feel no sympathy for the man in the article. he is seeing that he couldve gotten better gains but probably went into a conservative portfolio and now is salty.

honestly people just dont hold themselves accountable anymore - he signed the docs, you are telling me he didn't check or update in 6 years? please....


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## redsgomarching (Mar 6, 2016)

MrsPartridge said:


> With the size portfolio this retiree had, he should have spent some time and money on investment books. Even reading Moneysense would have led him away from bank advisors and towards couch potato. He says he paid 30K over the last 6 years but I think with 1 million invested at 2.5% or so MER, it could be more like 30,000 annually, no?
> 
> http://www.cbc.ca/news/canada/british-columbia/bank-s-deceptive-titles-put-investments-at-risk-1.4044702


yeah that is strange, would be that annually rather than over 6 years.


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## like_to_retire (Oct 9, 2016)

ian said:


> Investing does not have to be complex....


According to a TV bank commercial I saw last night, "Investing is complex"... who knew? The poor consumer moron in the commercial was inundated with complicated ideas like "buy low, sell high", so the only solution was to allow his bank to take over his investments.

Bank commercials in the last few years have made it quite clear that consumers are idiots and they shouldn't be messing around with complex things like investing. "I moved a few things around and saved you $1500". Now you can go out and blow that money I found hiding in your account. "You're richer than you think".

The majority of investors would do well to simply invest in a couch potato index strategy. They would easily best any bank advisor route many times over. These people are not interested in learning about investing, so basic index solutions will serve them well. 

If you are someone who wants to learn a little and you're not a hapless idiot, you could beat that index portfolio quite handily (another investing wives tale that it's pointless to try and beat the index), but most aren't interested in investing details.

ltr


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## Mookie (Feb 29, 2012)

The sad thing is that the situation in the article is far from unique. Your average Joe just has no interest in learning even the basics about investing. We spend 40 hours a week working for our money, but most can't be bothered to spend 1 or 2 hours a week to learn how to make that money work for them. How many people out there still think a TFSA is just some fancy savings account? If they can't figure that out, how are they going to know the difference between an Advisor and and Adviser?

Well, gotta run, I'm off to meet with my trusty local automobile investment advisor. He's got a great new Ferrari that he says will be a perfect fit for the transportation needs of my growing family. layful:


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## Eclectic12 (Oct 20, 2010)

like_to_retire said:


> According to a TV bank commercial I saw last night, "Investing is complex"...


I'll have to pay more attention ... the ones I can recall with that theme were robo-advisor firms like this one.
https://www.youtube.com/channel/UCbJXYtqMuLwd0S7pi_QGGzw


Cheers


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## like_to_retire (Oct 9, 2016)

Eclectic12 said:


> I'll have to pay more attention ... the ones I can recall with that theme were robo-advisor firms like this one.
> https://www.youtube.com/channel/UCbJXYtqMuLwd0S7pi_QGGzw
> 
> 
> Cheers


Yeah, that's the one. Well, so it wasn't a big 5 bank. Whatever. The message is clear. There's no way anyone can invest without help. Investing is complicated. The big 5 must love this tactic.

ltr


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## Nelley (Aug 14, 2016)

like_to_retire said:


> Yeah, that's the one. Well, so it wasn't a big 5 bank. Whatever. The message is clear. There's no way anyone can invest without help. Investing is complicated. The big 5 must love this tactic.
> 
> ltr


It is not just the financial industry-EVERYTHING is like that-if there is money to be made you will be lied to-this is why there is this continual push to "regulate" (shut down) speech on the Internet-the truth is a problem if it interferes with taking your money.


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## amitdi (May 31, 2012)

Beaver101 said:


> Or does a layman have to go to the regulators' website and search up all these fancy titles to determine who can ctually can advise and who can't?


if you want to spin it that way, then here's a devil's advocate question - 
does a millionaire just blindly follow a bank's employee with his million dollars for 6 years?

leading questions can turn the argument whichever way you want it to. fact of the matter is - if one is investing a huge amount, then one needs to to do the due diligence. people research when they buy car, house, expensive appliances even if there are salesmen to advise and answer your question. you dont give your money and say give me the best car or appliance. investing should be similar, do your research.


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## none (Jan 15, 2013)

Unfortunately I don't find this surprising. I'm continually surprised at how little interest people show in their finances. i guess I shouldn't be b/c up to about 3 years ago i wasn't really either. Reading the money sense guide to the perfect portfolio and playing with a compound interest calculator really was an epiphany for me. It also made me pretty made, not only for me but at how the Canadian government is all but complicit with the Financial industry to fleece the Canadian public.

For example, why do RESPs even exist? Why not just give the cash directly to universities and lower tuition? Why not expand CPP even further? why does a single mom waitress have to learn how to invest in index funds to ensure that her savings are appropriately managed? it's maddening.


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## ian (Jun 18, 2016)

It comes down to people taking a little responsibility for their own actions. Blames others can sometimes be the easy way out. A poor excuse for not doing the basics when purchasing a product or service.


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## none (Jan 15, 2013)

ian said:


> It comes down to people taking a little responsibility for their own actions. Blames others can sometimes be the easy way out. A poor excuse for not doing the basics when purchasing a product or service.


You could say the same thing about fat people. Everyone who is fat exhibits a lack of personal responsibility.


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## ian (Jun 18, 2016)

Being obese does not mean that you are blaming the grocer or the fast food restaurant for your obesity.


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## none (Jan 15, 2013)

No? 
http://www.foxnews.com/story/2002/09/21/fat-teens-sue-mcdonald.html


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## none (Jan 15, 2013)

I just didn't appreciate your implication that being afraid of taking charge of your investments (fear which is perpetuated by the industry) is some kind of personal failing. The smugness of some of the posts in this thread were getting a bit much. Anyway, my point is that you could say the same thing about all the fatties on this forum. Personal failings abound.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... but they're titled as "financial advisors", supposedly to "advise" but then there is that now revealed distinction of being an "advisor" who doesn't "advise" ... kind of misleading, don't you think? Or does a layman have to go to the regulators' website and search up all these fancy titles to determine who can ctually can advise and who can't? Moreover, shouldn't the bank be in a position of "trust"? At least, Canadian banks that Canadians are so proud of - or shareholders, I should say.
> 
> In this case, I'm surprised that there is no mention of a KYC form being signed prior to selling him the mutual funds.


The "advisor/adviser" term seems to be used interchangeably...so it really doesn't mean much.
http://english.stackexchange.com/qu...n-adviser-and-advisor-are-both-interchangeabl




> A common trick for misleading customers, according to Elford, is the banking industry's *use of the term "financial advisor" *— spelled with an "o."
> 
> He says "advisor" is an unregulated title that anyone can use, whereas the title "adviser" — spelled with an "e" — can only be used if the employee has a fiduciary responsibility to the client.
> 
> "Advisors can sell you the third, fourth, fifth or least beneficial product to you," Elford said. "They do that a great deal of the time if it makes them more commissions, or if their bank manager is telling them they need to sell more of the house-brand product."


So the banks just pretend they know how to invest a clients money, collect their commissions and fees and hope that the suckers don't take notice. ...
....as the Scotia bank slogan should read " YOUR making us richer than you think!"


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## Nelley (Aug 14, 2016)

none said:


> I just didn't appreciate your implication that being afraid of taking charge of your investments (fear which is perpetuated by the industry) is some kind of personal failing. The smugness of some of the posts in this thread were getting a bit much. Anyway, my point is that you could say the same thing about all the fatties on this forum. Personal failings abound.


It is lucky for you your prejudice is towards fat people and not Muslims-otherwise you would be writing from your Canadian prison cell.


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## MrsPartridge (May 15, 2016)

People see all sorts of experts and advisors plus all those books and courses so one might assume investing is very complicated. When they have lots of money, then it feels safer to let "the experts" guide them. Also, we can't ask friends how they're managing their retirement accounts. There is no one in real life I can talk to about what we say on these forums. So it's no wonder people turn to their banks for help. 

Banks need to be up front that they are for profit companies and not some benevolent altruistic branch of the government.


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## none (Jan 15, 2013)

What? I'm not prejudice against fat people. I'm just making a point about smug people who read a finance book and subsequently take point as bastions of personal responsibility yet are as equally flawed in different ways.


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## ian (Jun 18, 2016)

Why on earth would anyone think that banks are not 'for profit' companies?

Each quarter the news media seem to highlight how each one of the big 5 have exceeded their respective earnings estimates.


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## redsgomarching (Mar 6, 2016)

It's not a problem with the banks its problem with people and majority of people won't change. 

This is what I see; this guy got upset when he was losing money - probably was time to revamp his plan. Nearing retirement, no pension, yeah this is a no brainer this guy probably was risk-averse/more conservative. 

After the plan was changed there is no mention of him posting negative returns so lets look at the last 6 years of the S&P TSX
2011 -11% probably why he wanted to change his portfolio. 
2012 - 4%
13 - 9.55%
14 - 7.42%
15 - -11.09%
16 - 17.51%

Lets see his annualized returns for the last 6 years and compare the volatility of his portfolio with some of the volatility in the S&P Tsx 60 and most likely this snowflake would flinch if he saw any of those negative numbers.


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## caltran (Mar 16, 2017)

The article is long on words and short on detail. If he's retired then capital preservation is by far the first priority and growth is about the last.

I guess he was expecting 100% equity allocation like returns?


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## carverman (Nov 8, 2010)

MrsPartridge said:


> *
> Banks need to be up front that they are for profit companies *and not some benevolent altruistic branch of the government.


Isn't it apparent, with the billions of profit they make each year, and the low interest rates (0.8%) they pay on your savings, as well as charging hefty fees for every service they can think of..that it's a "given".

The banks are only interested in their money and wealth, not yours. They compete on interest rates and mortgages because they have to. 

Billions are paid out in mortgage interest...the banks pay very little tax on that profit, 
and in some cases no tax at all.


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## carverman (Nov 8, 2010)

redsgomarching said:


> It's not a problem with the banks its problem with people and majority of people won't change.
> 
> This is what I see; this guy got upset when he was losing money - probably was time to revamp his plan. Nearing retirement, no pension, yeah this is a no brainer this guy probably was risk-averse/more conservative.
> 
> ...


The economic climate right now is not good from bringing in solid returns. Somebody's still making money out there, but not the average guy. If he had a million dollars to invest, why did he go into a bank and ask for their "expert" opinion? The bank employees don't have a clue on what is going on in the economy
as far as solid investments. They show him a paper that the growth is not guaranteed, so you as the
investor has to take the risk...but they will still charge their management fee..for doing absolutle NOTHING!


$30K on 1 million for 6 years, that's $5K per year management fee, and I bet they never
reviewed his investment portfoiio or called him up to discuss it. Just collected their fee.

Why didn't he check to see how his investment was doing on a yearly basis and pull out
before it depreciated too much from his expectations and what they had told him would be
his ROI. 

No wonder the Canadian banks are starting to get a bad reputation..(TD pressure selling, etc). 

For that kind of money He could have bought a house in Toronto or Vancouver kept it for a year or
two and sold it for a handsome profit as a business venture or even moved into it for a year and sold it for a windfall profit as a principal residence. 

Times are a-changing and the Cash stores practically on every location these days are not the only
ones prepared to legally rob you. The banlks want a piece of the action too.


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## Beaver101 (Nov 14, 2011)

caltran said:


> *The article is long on words and short on detail*. If he's retired then capital preservation is by far the first priority and growth is about the last.
> 
> I guess he was expecting 100% equity allocation like returns?


 ... somewhat but then at the beginning of the article, it states:



> An RBC "financial advisor" — "advisor" with an "o" rather than an "e" is important, but more on that later — *invested his money in mutual funds, but when the portfolio performed poorly for three years and Black threatened to leave the bank*, he was sent to an RBC "vice-president" who would manage his money.
> 
> *Black received a financial plan that claimed his nest egg would earn "about six per cent in annual interest" when invested in different mutual funds, mostly owned by RBC.
> 
> *


. It would seemed he was talked into staying with RBC on the expectation (promise?) that he would get a better rate of return or 6% annually if he was personally (?) handled by a senior "financial" "advisor" with a VP title who is supposedly be more knowledgeable, and acting in the client's interest. If RBC had gotten this investor to sign a KYC, then that is their defence.


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## Beaver101 (Nov 14, 2011)

amitdi said:


> if you want to spin it that way, then here's a devil's advocate question -
> does a millionaire just blindly follow a bank's employee with his million dollars for 6 years? ...


 ... what do you mean that I want to spin it that way? If you actually care to "r-e-a-d" the article, it states,



> ... The *Ontario Securities Commission confirms *that *"adviser" is a legal term under securities law* that describes a person or company that is registered to give advice about securities, *whereas "advisor" is not.
> *
> In an email to Go Public, *the Canadian Securities Administrators confirmed that it does not regulate most titles used by employees in the financial industry. ..*


 ... so it sounds like the devil advocate in you says it's perfectly okay to continue with the fakery.


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## GreatLaker (Mar 23, 2014)

In a quick peruse of the OSC web site I only saw the term adviser, not advisor. The OSC says this about registration:

http://www.osc.gov.on.ca/en/Investors_res_working-with-adviser.htm


> About registration
> 
> In general, anyone selling securities or offering investment advice in Canada must register with their local securities regulator. Registration helps protect investors because securities regulators will only register individuals and firms if they are properly qualified.
> ...
> An individual’s title won’t tell you if they’re registered or in what category, so ask and be sure. Common business titles include financial adviser, investment adviser, investment consultant, investment specialist and seniors consultant. These titles are not legally defined terms or official registration categories.


Note it only refers to selling securities and offering investment advice. It does not talk about registration being needed to be a financial planner or financial adviser/advisor that does not sell investments or offer investment advice. This VP was selling investments and giving investment advice so he had to be registered with the securities regulator in his jurisdiction. To me the distinction is that investment sales reps must be registered, but still don't have a best interest standard, rather than the subtle adviser/advisor distinction.

This paper dated April 2016 discusses adding a best interest standard and fiduciary responsibility to reps registered under the OSC. 
http://www.osc.gov.on.ca/en/Securit...igations-advisers-dealers-representatives.htm
Does anyone know if that proposal was implemented?

A lot of people I know brag about their financial adviser, how knowledgeable and senior they are, what great advice they give, and have no inkling they are paying huge costs for an adviser to give them self-serving advice. One person I know brags how her adviser at a big brokerage house is an adviser and a lawyer... as if that drives better investment returns. When she says that all I hear is high costs and that unlike the nice lady at the bank branch, this adviser probably knows exactly what the long-term impact of self-serving advice and high-cost investments really is.


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## caltran (Mar 16, 2017)

Beaver101 said:


> ... somewhat but then at the beginning of the article, it states:
> 
> . It would seemed he was talked into staying with RBC on the expectation (promise?) that he would get a better rate of return or 6% annually if he was personally (?) handled by a senior "financial" "advisor" with a VP title who is supposedly be more knowledgeable, and acting in the client's interest. If RBC had gotten this investor to sign a KYC, then that is their defence.


He got 6% return... before the MERs! :highly_amused:


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## Just a Guy (Mar 27, 2012)

Funny how people always call for more legislation whenever something like this happens...

You can't legislate away stupidity. 

Of course, don't listen to someone like me, I'm not certified or officially qualified to advise anyone.

I also don't blame the bank employees. They are trained by the banks. Part of that training is being told they are helping people, which I think many truly believe. Of course their help also helps the bank.

It doesn't take a rocket scientist to figure out that some advice being given doesn't really make sense if you actually think about things, but people don't like to think...they just want the money.

How many people post on these forums every day about some hair brained idea to get rich quick? The people who actually make money try to warn them off, but get bombarded with insults...if they fluke off and hit a home run, they think they are geniuses and the advisors are fools, so they repeat it until they lose their shirt...

Meanwhile, the successful ones keep hitting singles, and keep getting slammed by the hero of the day...but they win in the end.

Then there are calls that they played unfairly, get the government to step in and divvy up the winnings to the ones who lost...

My first question to people who want to give me advice, or have me change my strategy, is always "how do you make money?", my second question is "what is your net worth?". If they don't use their own advice, and haven't been highly successful in doing so, I think it's a pretty good indicator as to the quality of their advice. Most "advisors" or "advisers" make their money from a salary or commissions, not investments. Heck, most authors make their money from selling books (CAMPBELL) and seminars. 

But, as I said, don't listen to me, I'm technically not qualified to talk on these issues...I just make money of investing, I don't actually know anything according to legislation.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... somewhat but then at the beginning of the article, it states:
> 
> . It would seemed he was talked into staying with RBC on the expectation (promise?) that he would get a better rate of return or 6% annually if* he was personally (?) handled by a senior "financial" "advisor" with a VP title *who is supposedly be more knowledgeable, and acting in the client's interest. If RBC had gotten this investor to sign a KYC, then that is their defence.





> The stakes are high, says Elford, who points out that a *two per cent management fee on mutual funds typically cuts an investor's retirement fund by about half over a 35-year period.*





> "I had zero training and had to learn everything on the go," he said.





> "The term financial advisors is bank jargon for salesperson," he said. "At least in other industries they are more open about it. You sell cars? Well, you are a car salesperson. We are not advising people on anything. We are just trying to make sales."


Ah yes..the business card with gold letters...Senior Adviser for RBC?Dominion Securities Investments. 
On his wall of his office, all kinds of "promotional certicates" showing he was the best of his kind..faced with such overwhelming display of "know how". how could unitiated man off the street, clutching his 1 million check in his hand..go wrong?
As the saying goes.."if you can't dazzle them with brilliance, then baffle them with BS."

"sign here and here and we can categorically state that our invest frim can realize at least 6% growth of your retirement
nestegg if you commit to us and trust us'....

in small print somewhere on the BACK of the pages he signed off...it would read....
"present performance of these funds are no guarantee of future performance, and the investor has to assume the risk


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## Nelley (Aug 14, 2016)

I guess we are lucky that Selfie and Wynnebag haven't outlawed DIY investing yet-make us all pay huge fees to "financial professionals" to keep us safe (and poor).


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## carverman (Nov 8, 2010)

Just a Guy said:


> Of course, don't listen to someone like me, I'm not certified or officially qualified to advise anyone.
> 
> But, as I said, don't listen to me, I'm technically not qualified to talk on these issues...I just make money of investing, I don't actually know anything according to legislation.


so you are essentially admitting that that diploma on your "virtual wall " certifies that <JAG> has attended and earned a degree in the "College of Chicken Knowledge"..(sorry that's for the KFC employees)...I meant "Investment Knowledge", and is thereby given the title of Chief Adviser..(note the "e" instead of the "o".. that makes it "offiicial" :biggrin-new:


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## Eclectic12 (Oct 20, 2010)

Nelley said:


> like_to_retire said:
> 
> 
> > Yeah, that's the one. Well, so it wasn't a big 5 bank. Whatever. The message is clear. There's no way anyone can invest without help. Investing is complicated. The big 5 must love this tactic.
> ...


Make you wonder why so many can figure out that less expensive DIY or third parties for say auto repairs, roof repairs or mortgages but not for investments.


Cheers


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## Just a Guy (Mar 27, 2012)

Carver, nope. I've got no certificates whatsoever, make no claims to having any knowledge whatsoever and warn people not to listen to anything I say.

Pretend you're my spouse or kids.


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## Eclectic12 (Oct 20, 2010)

^^^^

The spouse part, from what I understand - isn't great ... kids may be fine. 

IMO best friend is likely better.


Cheers


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## sags (May 15, 2010)

There is something not right in this story.

If the guy saved $1,000,000 in 35 years, why does he need investment advice ?


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## ian (Jun 18, 2016)

We had a less than satisfactory experience in dealing with a bank that we had dealt with for years. We were actually on a fee based plan. Pending retirement, a looming substantial stock option exercise, and not being pleased with the quality of the service, among other things, led us down the path of searching for a new firm.

I certainly did not blame the bank for the poor service or mediocre advice. I could have switched earlier. I had two regrets. The first was that we went with the bank in the first place, the second that we did not punt them sooner.

It would have been much easier to stay with the bank. I spent the better part of six months asking friends and colleagues who they dealt with. I could not believe how many people said they we unhappy but were seemingly unwilling to do anything about it. We finally found a firm that we wanted to deal with and switched five years ago. We have been very pleased with the results.

Looking back in the rear view mirror I can now see just how poor the bank service was and at the end of our relationship, how inexperienced the advisors were. The service was poor, the returns mediocre. Because we were on a fee for service plan the bank assured us that we would be dealing with their best qualified advisors and given access to tax and estate planning. Our last meeting was with an advisor who could not have been more that 23. Don't think he was even shaving yet. He was clueless yet he was recommending products that I knew to be poor selections given our investment goals. We subsequently learned from a former employee of the bank that many people like us also walked from the service.

So I don't blame the bank. We should have walked after 18 months. Instead we stuck with it for 30 months. Now,when we look at our 2016 returns and our five year average net return we shake our collective heads and are thankful that we punted the bank advisor, adviser, or whatever they were and the bank. We have an over 60 account with them, a small USD account with them, and a safe deposit box. We voted with our feet and with our wallets.


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## Koogie (Dec 15, 2014)

Just a Guy said:


> You can't legislate away stupidity.


Nor should we. As "sad" as this guys story is, don't forget we need him and the millions like him. They and their "advisors" are on the other side of each market transaction you make. Smart money needs stupid money on the other side of the table.


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## Pluto (Sep 12, 2013)

Koogie said:


> Nor should we. As "sad" as this guys story is, don't forget we need him and the millions like him. They and their "advisors" are on the other side of each market transaction you make. Smart money needs stupid money on the other side of the table.


It is good that the news outlet is telling his story. 
But I don't feel sad for the guy. That's because over the years i have attempted to assist numerous people to get way from banks and other money managment firms. Only one took me up on the offer. The rest seem to want to be reemed. My attitude became, if they want to be taken, so be it. 

Also this story is one reason why accumulating bank stock is on my priority list. I am led to believe that bank exec's don't have their own savings anywhere near their own wealth management divisions. They are far more likely to be buying bank stock with their savings. 

I wonder if the media would consider interviewing bank exec's and ask them where they put thier savings? Why doesn't BNN do that?


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## Argonaut (Dec 7, 2010)

Meh, this guy didn't have it so bad. At least he was with a bank where they have a tiny shred of decency, and follow some computer asset allocation method. I know personally of elder people who were taken by brokers who gave them "hot tips" on penny stocks and the like, losing most everything in the process.


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## kcowan (Jul 1, 2010)

I have been DIY since the mid-90s. I have talked to many successful business associates and NONE of them were willing to manage their portfolios. They say they want to "stick to their knitting". So I am heavy into bank stocks. More power to them!

One of the things that advisors do is show total return and compare to the benchmarks. I tracked my own portfolio so I always knew net return.

I think most advisors have good net value of their own because they have spend years getting 2-3% for nothing!


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## Beaver101 (Nov 14, 2011)

sags said:


> There is something not right in this story.
> 
> If the guy saved $1,000,000 in 35 years, why does he need investment advice ?


 ... great question!


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## fplan (Feb 20, 2014)

banks are making record profits ..how is that possible?? 
Simple - reducing employees , cheating customers like these . so far no info on RE related fraud commited by banks..guess what non of the big bank execs were put in jail during/after 2008 crash..why worry .. so motto of banks is take risks , commit frad , worst case we have tax payers to help us..

Imagine if somebody says take risk , we have covered your back..most of would do the same thing...


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## carverman (Nov 8, 2010)

Just a Guy said:


> Carver, nope. I've got no certificates whatsoever, make no claims to having any knowledge whatsoever and warn people not to listen to anything I say.
> 
> Pretend you're my spouse or kids.


It was meant as humour. Carry on.


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## carverman (Nov 8, 2010)

Pluto said:


> They are far more likely to be buying bank stock with their savings.
> 
> I wonder if the media would consider interviewing bank exec's and ask them where they put thier savings? Why doesn't BNN do that?


It's obvious. Most if not all executives get stock options and bonuses based on the banks profit line. Besides big fat million dollar plus pensions, they get a big compensation package. 




> The report says all five of Canada’s largest banks have cut the proportion of stock options they grant their CEOs in recent years.
> 
> Banks previously decided how much equity they wanted to grant CEOs each year, and split the amount evenly between grants of stock options and grants of share units. In 2014, however, stock options accounted for 20 per cent of total new equity grants at the median for the five banks, while share units accounted for 80 per cent of new equity grants.



The rank and file probably don't have those options.


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## Eclectic12 (Oct 20, 2010)

Argonaut said:


> Meh, this guy didn't have it so bad. At least he was with a bank where they have a tiny shred of decency, and follow some computer asset allocation method. I know personally of elder people who were taken by brokers who gave them "hot tips" on penny stocks and the like, losing most everything in the process.


Yes ... another albeit older example.



> ... Markarian, a retired machine-shop owner who is 71. Markarian and his wife had about $1 million extracted from their investment accounts to guarantee the trading losses of Migirdic's 73- year-old uncle in Turkey.


Mirgiridc is a former broker with CIBC World Markets in Montreal.

http://www.investorvoice.ca/Cases/Investor/Markarian/Migirdic_30June04.htm


I'm not finding the link to the other Quebec broker who was being sued as he churned through around $2 million in a couple of years despite the investor asking for a conservative portfolio to fund his retirement.


Cheers


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## Mookie (Feb 29, 2012)

Pluto said:


> ...over the years i have attempted to assist numerous people to get way from banks and other money managment firms. Only one took me up on the offer. The rest seem to want to be reemed. My attitude became, if they want to be taken, so be it.


I've made similar attempts, with similar results. Only my parents took me up on the offer, and I'm now working with them to manage their money based on their priorities.



Pluto said:


> Also this story is one reason why accumulating bank stock is on my priority list. I am led to believe that bank exec's don't have their own savings anywhere near their own wealth management divisions. They are far more likely to be buying bank stock with their savings.


My parents and I love our bank stocks.


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## Eder (Feb 16, 2011)

carverman said:


> Besides big fat million dollar plus pensions, they get a big compensation package.


Because they earn it. I've always said we need to pay our Prime Minister 50 million/year...then we would get some reasonably qualified people interested in the job.


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## Eclectic12 (Oct 20, 2010)

Mookie said:


> Pluto said:
> 
> 
> > ... That's because over the years i have attempted to assist numerous people to get way from banks and other money managment firms. Only one took me up on the offer ...
> ...


I did manage to get Mom to setup a PCF account. 

Dad and I were quickly shaking out heads. Despite several repetitions of "savings can only be transferred next day", she insisted on all her $$ going into savings. We both questioned it but she wanted it that way. Then she was frustrated that she couldn't pay for something with her debit card, ten minutes later.

It wasn't a total loss as somehow, ING Direct (now Tangerine) was more understandable to her as none of the $$ were available in her linked account immediately. :eek2:


Go figure! 


Anyway, she used ING Direct so I'm not complaining. :biggrin:


Cheers


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## Koogie (Dec 15, 2014)

Eder said:


> Because they earn it. I've always said we need to pay our Prime Minister 50 million/year...then we would get some reasonably qualified people interested in the job.


Plus then they could afford their own nannies...


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## Eclectic12 (Oct 20, 2010)

Eder said:


> Because they earn it. I've always said we need to pay our Prime Minister 50 million/year...then we would get some reasonably qualified people interested in the job.


If they all "earn it" ... why's the successful CEO for one company pulling in $300K while a similar sized company CEO pulling in $1.5 million while the CEO that lasted all of nine months paid a $23 million severance package?


Cheers


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## Eder (Feb 16, 2011)

I was talking about Canadian big 5 bank CEO's...no idea or care what other CEO's earn. Gord Nixon was good to me & I was happy to pay his wages.


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## Just a Guy (Mar 27, 2012)

Funny how business people refuse to treat thei investment like a business...they can spend all day looking for inefficiency, people trying to scam them, poor performance, etc. But, when it comes to people managing their money, they want to stick to their knitting...

Then again I've found common sense isn't all that common. 

I guess being broke helps to put things into perspective. I treat everything like a business. Numbers don't lie. When I first got started in investing, someone suggested mutual funds...I looked into them and almost bought a mutual fund that owned only sellers of mutual funds...then I decided the mer was too high.

Instead of bashing (or supporting) the banks for cashing in on stupid people, why don't we talk about the masters of this area, insurance companies. They've got the government mandating their purchase, they raise their rates and lower their coverage at will and, to top it all off, go out of their way to deny any claims as often as possible.

They make the banks look like angels.


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## Rusty O'Toole (Feb 1, 2012)

"Retiree feels duped". That's just it. There it is in a nut shell. After 65 years of getting hosed he is starting to wise up. Most never do get wise. That is why Canadian banks are the most profitable on earth. They take the public to the cleaners year after year. Next year he will quit in a huff - and hand his money over to some other smooth talking shyster. A few more years and he will find out the new guy is no better than the last, and switch again. By the time he figures out they are all the same he will be dead and they will scam a few more bucks out of his estate, if there is any money left.

It may be too late for him to wise up but it's never too late to learn "do you want fries with that".


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## redsgomarching (Mar 6, 2016)

can easily turn around and say i feel duped as a young professional getting asked to have 50 years of experience to do a job that anyone with a high school education could get years ago who are now getting paid 100-200k + to sit on their @$$ and refusing to create more jobs to distribute the wealth.


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## Just a Guy (Mar 27, 2012)

I feel duped.

What I was told about santa clause, Easter bunny, tooth fairy, my university recruiter, my parents, society while growing up, the government...the list goes on.

Where's my free cash and sympathy?


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## redsgomarching (Mar 6, 2016)

Just a Guy said:


> I feel duped.
> 
> What I was told about santa clause, Easter bunny, tooth fairy, my university recruiter, my parents, society while growing up, the government...the list goes on.
> 
> Where's my free cash and sympathy?


lets contact CBC and make generation x pay!!!


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## mordko (Jan 23, 2016)

Eclectic12 said:


> If they all "earn it" ... why's the successful CEO for one company pulling in $300K while a similar sized company CEO pulling in $1.5 million while the CEO that lasted all of nine months paid a $23 million severance package?
> 
> 
> Cheers


...but the Bomardier executives totally deserved it. They have just cashed in taxpayer funding dished out by Trudeau. The man is so generous!


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## canew90 (Jul 13, 2016)

We only started achieving success when we stopped thinking in terms of market returns and looked at how much income our investments were generating. Certainly total return is important, but actually seeing those gains are not always that clear. Markets and individual company stock prices can vary greatly even over longer periods. Gains can be wiped quickly, as during the financial crisis. But if one sees the annual income of your investments growing, during all market cycles, and at a rate higher than inflation than one can gain confidence that they are doing something right. 
Had the guy invested in this manner over time, building up to a $1Mil portfolio, he would have known how he was doing all along and probably not be concerned about the market value of his holdings.


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## mordko (Jan 23, 2016)

While ^ may help psychologically in certain cases, it's not the real story. And investment income is not immune from cycles. Distributions may not have dropped during the last crisis, but they may well drop during the next one.


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## Koogie (Dec 15, 2014)

Just a Guy said:


> Funny how business people refuse to treat thei investment like a business...they can spend all day looking for inefficiency, people trying to scam them, poor performance, etc. But, when it comes to people managing their money, they want to stick to their knitting...


I disagree. The most successful and intelligent businessmen know that they can't do everything themselves and they can't gain professional competency in everything. That is why they employ accountants, lawyers, engineers, etc..

They carry through that approach to their personal investing. We can argue until the cows come home whether that is correct or not. Obviously from your and my perspective, it isn't and it's not how we run our lives (for the record, I am just a middling successful businessman). 

However, if it was as easy to find a good financial adviser as it is to find a good lawyer, for instance, they would be fine. I think this reveals the problem is not with people who want to have a professional handle their money instead of doing it themselves but the problem is the financial industry itself and the preponderance of salesmen, leaches and liars that it 
employs and the lack of enforced standards of training and professionalism. If they all had a fiduciary responsibility.....




Just a Guy said:


> Instead of bashing (or supporting) the banks for cashing in on stupid people, why don't we talk about the masters of this area, insurance companies. They've got the government mandating their purchase, they raise their rates and lower their coverage at will and, to top it all off, go out of their way to deny any claims as often as possible.
> They make the banks look like angels.


Agreed. I own quite a bit of stock of these legally mandated pilferers. If you can't beat 'em....


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## Just a Guy (Mar 27, 2012)

I agree that, as a businessman, I hire experts to do things I don't understand well. However I oversee them and have expectations. If I don't think I'm getting a good ROI from my lawyer, accountant, etc, I get a new one, I don't continue on business as usual...if I did that, I probably wouldn't have any business as usual.


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## OhGreatGuru (May 24, 2009)

Something about Mr. Black's story doesn't make sense. I don't want to defend RBC, but Dominion Securities is a full-service brokerage. Yes, they will have significant management fees for this service, but they have access to stocks and thousands of mutual funds. They have internal analysts that recommend Buy/Sell lists to their "advisors" to work from, so individual advisors don't have to be expert market analysts. I think it would be unusual for a DS account to be invested mainly in RBC mutual funds. (My spouse's account is less than half the size of Mr. Black's and it contains no RBC mutual funds for example.) In fact the advisor should be happy to sell him third-party DSC funds instead of the bank's no-fee funds. Unless RBC/DS has followed the same corrupt practice of TD in making performance appraisals dependent on the sale of the bank's own mutual funds.

I think we need to know more about what Mr. Black told Dominion Securities about his investor profile before coming to more conclusions.


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## Just a Guy (Mar 27, 2012)

Considering how many people I know who actually lose money in this market using questionable advisors, I really don't understand what this guy is complaining about. He trying to abdicated any personal responsibility, but he handed his money over to someone else who promised to make 6% while charging 3%. 

Would he prefer someone like Bernie who promissed upwards of 20% and took everything?


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## carverman (Nov 8, 2010)

Just a Guy said:


> Considering how many people I know who actually lose money in this market using questionable advisors, I really don't understand what this guy is complaining about. He trying to abdicated any personal responsibility, but he handed his money over to someone else who promised to make 6% while charging 3%.


well..we really don't know the full story behind this sad tale. 

While they may have promised him to make 6%, there was no guarantee that he would make 6% per year over 6 years, so management of his portfolio was imperative.

I think he was naive to trust them to look after his money while he went off to do other things. 

If their mutual funds didn't perform to RBC/Dominion Securities published data, then it is not the bank
advisor/adviser's fault. I'm sure they would give him a prospectus of their various mutual funds and how these funds performed over 1, 2, and maybe 5 years at time of investment.
if they didn't it, it was their fault, but IF he didn't understand how it worked, then he should have stuck his money in ladder GICs (100K per GIC) over 5 years.
The GICs would have at least brought in 2.0 -2.5% ROI and he could sit back and not worry. 
Instead he chose to enter an investment area that he wasn't familiar with....that's his problem.

If RBC/DSC actually reviewed his portfolio and updated him..where was he to take appropriate action to
see that his million dollar investment had at least 6% ROI? 


> *Step 4: Managing your portfolio*
> The last step in the process is to monitor your progress towards your continued success. *Your Investment Advisor will review your portfolio with you on a regular basis, and recommend appropriate changes to keep you on track. *You will also receive detailed account statements, portfolio review statements, transaction updates and tax reports.


http://www.rbcds.com/investing-portfolio-management.html





> Would he prefer someone like Bernie who promissed upwards of 20% and took everything?


Well there is a big difference between Bernie Maddoff's pyraimid investment scheme and DSC mutual funds.


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## Koogie (Dec 15, 2014)

From our mouths to their ears (in Ontario at least). Looks like Sousa got something right for once:

Ontario targets unethical financial advisers with new industry measures
http://www.theglobeandmail.com/repo...-more-tools-to-collect-fines/article34516452/

""The Ontario government announced new measures on Friday aimed at protecting investors from unethical advisers and enhancing oversight of the financial services industry.""

""Among the policies under consideration are a registry of financial planners and advisers, the limiting of the use of professional titles that might lead to consumer confusion, and a statutory duty to act in the best interests of consumers.
Mr. Sousa also signalled his support for new standards to regulate qualifications and titles used by financial advisers, which can be confusing for many investors.""


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## fplan (Feb 20, 2014)

carverman said:


> well..we really don't know the full story behind this sad tale.
> 
> While they may have promised him to make 6%, there was no guarantee that he would make 6% per year over 6 years, so management of his portfolio was imperative.
> 
> ...


you are right. Bernie Maddoff cheated his cutomers and was sent to jail because his firm is small one.. while big banks like JPM , BOA , GS also cheated customers (with the help of S&P , finth , Moodys) and none of their exec were sent to jail because they belong to big frims. end of the day , big fish gets away .. no matter what happens , big banks like RBC , TD , BMO execs will not be procecuted or sent to jail..


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## Beaver101 (Nov 14, 2011)

Koogie said:


> From our mouths to their ears (in Ontario at least). *Looks like Sousa got something right for once*:
> 
> Ontario targets unethical financial advisers with new industry measures
> 
> ...


 ... I wouldn't be so quick to rejoice on this new industry "measures". Will it bite or just continue barking?


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## kcowan (Jul 1, 2010)

Just a Guy said:


> Instead of bashing (or supporting) the banks for cashing in on stupid people, why don't we talk about the masters of this area, insurance companies. They've got the government mandating their purchase, they raise their rates and lower their coverage at will and, to top it all off, go out of their way to deny any claims as often as possible.
> 
> They make the banks look like angels.


:triumphant:
It is because most do not understand insurance. Even worse than banking.
e.g. Buy when you are 20 and get a lower rate than at 40!
Aside from developing pre-existing conditions, this is just simple math.


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## new dog (Jun 21, 2016)

Just grab a monthly income fund from one of the banks and you basically get what these advisors will give you without any trouble and this fund isn't even that great.

http://quote.morningstar.ca/quicktakes/fund/f_ca.aspx?t=0P0000707U&region=CAN&culture=en-CA


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## CalgaryPotato (Mar 7, 2015)

sags said:


> There is something not right in this story.
> 
> If the guy saved $1,000,000 in 35 years, why does he need investment advice ?


We don't know when he got the money or how it has done over the years. I know a lot of seniors who put money into Canadian Savings Bonds over the years and made tons of money doing that because the interest rates were so high. 

Anyway, banks make money selling products. I can't begrudge them for doing that, any more than I can begrudge car companies for not selling me a car at the same price they get it for. 

Like others have mentioned, he was probably in a much more conservative portfolio than those he is comparing himself too. And while the fee's for the big banks are high, they are hardly hidden fees. He could have easily figured out how much he was expecting to pay per year up front.

This article to me is the equivalent, of someone who shops at 7-11 for 5 years, suddenly realizing their is a superstore down the block, and calculating out how much they could have saved by shopping there, and then blaming the 7-11.


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## redsgomarching (Mar 6, 2016)

CalgaryPotato said:


> We don't know when he got the money or how it has done over the years. I know a lot of seniors who put money into Canadian Savings Bonds over the years and made tons of money doing that because the interest rates were so high.
> 
> Anyway, banks make money selling products. I can't begrudge them for doing that, any more than I can begrudge car companies for not selling me a car at the same price they get it for.
> 
> ...


and now real people like me have a small loss position because of investor reaction, i should sue him for causing market fluctuations! he probably had a short position on the banks!


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## carverman (Nov 8, 2010)

CalgaryPotato said:


> This article to me is the equivalent, of someone who shops at 7-11 for 5 years, suddenly realizing their is a superstore down the block, and calculating out how much they could have saved by shopping there, and then blaming the 7-11.


Hardly a valid comparison. When you shop at 7-11, you pay higher prices for the convenience of shopping there.

Back to the retiree's somewhat skewed story about how he was *hard done* by by the investment bank.

1. He should have asked more questions before signing anything and giving them the check for $1,000.000.
2. He should have investigated other investment options for ROI....(this is the only point that relates to "one stop shopping at 7-11"
3. He should have asked about the management fee expressed as a percentage of the overall investment.

Sure the banks like to make money but $30,000 management fee over only 6 years? ...
...I would like to ask him "what the hell where you thinking?"

4. He should have done due diligence every 6 months - to a year, and pulled his money out after the first year of negative returns +
excessive management fees. Assuming that his funds were not locked in the bank's mutual funds.

This guy was a not an investor..trusting others to manage his money and make a profit for him.
He would have been better off with a ladder style GIC from several banks. $250k per bank at 2.5% interest with no management fees
= $6250k per $250k investment per year x 6 years = $37,500 

Then go and investigate other investment banks with similar GIC interest rates (250K x 4) = $37,500 x 4 = $150k in 6 years. 

No management fees, no BS, and other than paying the tax man, he would have had his original $1,000,000 to re-invest.

After 12 years...$300K (plus accrued interest on interest) before taxes...


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## Beaver101 (Nov 14, 2011)

redsgomarching said:


> and now real people like me have a small loss position because of investor reaction, *i should sue him for causing market fluctuations! he probably had a short position on the banks*!


 ... yep, you should, presuming that he was shorting the banks and see how far you can get ... maybe you might have better luck than him.


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## Nerd Investor (Nov 3, 2015)

Active mutual funds in Canada generally under-perform and are too expensive so not many surprises there. This guy may have gotten terrible service but he may not have, there a so many details that are missing/unclear/confusing:

1) Was this actually Dominion Securities (as stated) or was it the bank? Because as mentioned earlier Dominion Securities is a full service brokerage. It seems incredibly unlikely he'd have all RBC mutual funds if this is the case. 
2) What was his investor profile? Because comparing his returns to a market index is pretty useless unless he was 100% equities (which I highly doubt). 
3) Do they actually mean $30,000 over 6 years? Because that actually seems unrealistically cheap, at least on a fee based account. That's about 0.5% a year. 
4) What is the actual 6 year period we're taking about anyway? 
5) When, exactly was the final plan done? Was the 6% that was "promised" (I think the actual word was probably projected) before or after fees? A few years ago, 6% would be considered fairly normal for a conservative portfolio and probably still in line with a balanced portfolio (depending on whether it is before or after fees and the amount of said fees). 

In terms of the negative connotation about being "licensed as a salesman" , there is currently no way to legally give investment advice or management money without being registered as a dealer-rep of some kind. Even completely independent advisers are licensed to sell securities/mutual funds.


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