# Bank handling RIF for Mom, not doing a good job, what to do?



## daddybigbucks (Jan 30, 2011)

Hello, I was just on vacation and saw my 73 yr old Mom (who is in great health)who lives in different provinces.

*Background.*
When my father died 9 years ago, she got his substantial stock investment account. (i am not sure but think around ~700K)
She proceeded to go with a big bank adviser, who was going to shift all the money and stocks into an easy account for her. They would manage it from there and give her monthly payouts from the RIF.


On Vacation, i mentioned how the stock market is at an all time high and her stocks must be doing very well. She mentioned that her stocks were at a low and she was getting concerned. The total account was about 400K now after 9 years. She gets about $1500 /month. ($1500/month would be about $162,000 for 9 years)
I had a look at one of her monthly account details.
What i saw was:
a whole lot of trading, 
dividends of $1000/month 
management fees of $1000/month


I am wondering how to go about improving the situation and would like some help?
Should i ask them for 10 year, 5 year, 3 year, 1 year financial statements showing rate of return, increase in value ,dividends, management fees and have them compared to some benchmark ie TSX 60?

any input would be appreciated before i start any process with the bank.


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## OhGreatGuru (May 24, 2009)

The high management fees and frequent trading are bad signs. But to get a proper picture you need to work out IRR, since she is making monthly withdrawals. That means getting statements for the part 9 years and putting the data into a spreadsheet, unless the bank will do it for you - which I doubt. Has she been withdrawing only minimum RRIF payments, or a constant amount? If the latter, that would accelerate depreciation of the account.

PS. Are you sure those are monthly fees, not quarterly? Check her annual tax statements to confirm.


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## kelaa (Apr 5, 2016)

3% fees sound a bit high. I'm not sure if a bank is that greedy. 

With the 400k, I would get 5-6 dividend stocks and 4-5 REITS / preferred shares and call it a day. Of course principal and cashflow not guarranteed, but I'd be okay with the risk.


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## AltaRed (Jun 8, 2009)

I agree with OGG that the OP needs to start with copies of all the statements for those 9 years which his mother should have and get a feel for the number of trades per year and fees* per year. All the data could be then plugged into a spreadsheet, or put into a software package like Quicken to ger a feel for IRR.

Churn would be a major concern. I'd be concerned if there were more than 15-20 stocks in the portfolio and more than 5-8 transactions a year. My view of a RIF would be 1 transaction a year to fund the annual withdrawal, and maybe 2 more to swap one stock in the portfolio to another.

The yield looks right, about 3% for a group of dividend stocks.

* monthly fee of $1000 is way over the top. I agree it needs to be verified that this is not quarterly. $400k @ 1% AUM would be $4k/yr fees ($1k/qtr)


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## OhGreatGuru (May 24, 2009)

You also need to establish if the monthly payments are based on the minimum withdrawal rates; if so are they based on her late husband's age; if they are more than the minimum is there withholding tax you are not seeing on the statements?


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