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Levels of financial advisor service within a bank

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  • Mar 13th, 2014 3:07 pm
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Deal Addict
May 7, 2006
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Toronto

Levels of financial advisor service within a bank

Hi guys

I've stored a ton of life savings in high interest savings now, but it's earning a measly <2% at TD right now.

My family has a TD "investment adviser" with designations CFP, FCSI, FMA that I am wondering if I should use in the next few months because I won't have the time yet to do my own research.

He charges about 0.5% of the final transaction, and the bank/financial institution charges the rest. He used to charge more but I think there must have been some banking policy legislation that made it harder for advisers to charge higher rates, because he reduced his rates?

He only sells me funds like TSX-60. I am not sure if he sells stocks since he's never offered them to me. I am beginning to wonder if he's just a higher level version of a bank rep, because he only sells me mutual funds.
He currently only contacts me at most annually to see if I want to switch my asset allocation around.

I am wondering if I can negotiate for fees, and if I should be asking for higher level service?

Thanks

[Edited, Updated]
21 replies
Jr. Member
Aug 31, 2010
120 posts
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Winnipeg
i will rather go with a DI account and do it on my own.

any so-called financial advisor (in banks, probably I should be more specific) knows nothing more than you. I find they all have limited knowledge on how much fee it will cost you to buy this buy that, they have bank's rules to follow, and even for some GIC, they have trouble to explain well.

my honest opinion, it's your own money, when comes to investment, you can only trust your own. if you say you don't have time to do your own research, then well, you should find the time, it's your money after all.

I have very little knowledge of finance and time, but my own investment in the last couple years have achieved over 15% annual return, which I believe it's not even the best since the market was so low after 2008. many other people can probably have had over 25% return.
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Jul 1, 2007
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Do you know more specifically what types of products you are in? Very vague what you wrote. Is he an independent advisor or is he with some other firm or with the bank?
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
Oct 14, 2004
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Thalo wrote: Do you know more specifically what types of products you are in? Very vague what you wrote. Is he an independent advisor or is he with some other firm or with the bank?
If you have more than 100k of investable assets, you can work with a TD Waterhouse CFP who does a lot more than just sell you some mutual funds. Look into it.
Deal Addict
May 7, 2006
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Hi guys, I updated my info. Just wondering if you could comment on it.

Should I be worried that our adviser doesn't have a CA or CFA?
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Nov 29, 2011
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Grimsby
Two words: Index funds.

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Deal Addict
Dec 4, 2011
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Unless you are with a private banking advisor, these clowns with 14 designations that only push their banks index funds will teach you nothing more than reading about the Couch Potato portfolio would.
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Oct 14, 2001
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aokec wrote: Hi guys, I updated my info. Just wondering if you could comment on it.

Should I be worried that our adviser doesn't have a CA or CFA?
Quick question, what does having a CA designation has to do with being a financial advisor ? Personally, I'd be worried if my FA was a CA.
Member
May 23, 2013
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Thanh wrote: Quick question, what does having a CA designation has to do with being a financial advisor ? Personally, I'd be worried if my FA was a CA.
If by 'CA' you mean 'Chartered Accountant', worried seems a bit extreme, and I'd actually argue a CA is better for some 'financial advisory' tasks than your typical FA. (Note: I see financial advisory as involving both financial planning and investing.) So not the investing part of course, but the financial planning aspect that includes tax planning and estate planning. Personally, I've never understood why people would prefer going to see their FA (even a CFP) for tax planning over an actual professional in the tax field that is up-to-date on those relevant matters. I also like that a CA is not paid by commission, so they don't have a separate vested interest or conflict of interest in the type of advice they give you (generally speaking, of course). I certainly wouldn't be worried in any case.
Member
Nov 6, 2012
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AB
aokec wrote: Hi guys, I updated my info. Just wondering if you could comment on it. giving

Should I be worried that our adviser doesn't have a CA or CFA?
Not sure why you would want a chartered accountant or analyst giving you financial planning advice. Not that the arent prestigious designations but a CFP and CIM are more
where you should be if youre wanting purely personal financial planning advice...
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Oct 14, 2001
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rog10s wrote: If by 'CA' you mean 'Chartered Accountant', worried seems a bit extreme, and I'd actually argue a CA is better for some 'financial advisory' tasks than your typical FA. (Note: I see financial advisory as involving both financial planning and investing.) So not the investing part of course, but the financial planning aspect that includes tax planning and estate planning. Personally, I've never understood why people would prefer going to see their FA (even a CFP) for tax planning over an actual professional in the tax field that is up-to-date on those relevant matters. I also like that a CA is not paid by commission, so they don't have a separate vested interest or conflict of interest in the type of advice they give you (generally speaking, of course). I certainly wouldn't be worried in any case.
Tax and estate planning are not part of accountant's field of expertise. For expert advice on these topics, you need a lawyer. And most CA's don't deal with taxation so only a few might be up-to-date.
Sr. Member
Apr 12, 2012
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If you want the brightest minds managing your money, just buy some BRK.B shares (Berkshire Hathaway). Can't beat Warren Buffet. Plus, there is no MER.
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Jul 1, 2007
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James_TheVirus wrote: If you have more than 100k of investable assets, you can work with a TD Waterhouse CFP who does a lot more than just sell you some mutual funds. Look into it.
I used to be one. :) And no, they don't sell anything other than mutual funds, unless GICs count as "a lot more". They're a step down from the IA that the OP's family is using (who are actually able to offer more than just mutual funds).
aokec wrote: Hi guys, I updated my info. Just wondering if you could comment on it.

Should I be worried that our adviser doesn't have a CA or CFA?
Like others mentioned CA is an accounting designation. If a CA is working in a bank as an advisor I'd be worried because why isn't he/she making a lot more money as an accountant?

CFAs are very hard to find at the retail level. If you do find a CFA who wants to manage your money for you (and you don't have over a million to invest) consider yourself lucky.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Sep 13, 2003
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lemieux035 wrote: If you want the brightest minds managing your money, just buy some BRK.B shares (Berkshire Hathaway). Can't beat Warren Buffet. Plus, there is no MER.
If only we could afford one share. I wonder how many people own just one share. Are you even allowed to buy just one ?
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May 23, 2013
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Thanh wrote: Tax and estate planning are not part of accountant's field of expertise. For expert advice on these topics, you need a lawyer. And most CA's don't deal with taxation so only a few might be up-to-date.
I'm not talking about your average CA, I'm talking about those in public practice that deal with tax regularly. There are obviously many other CAs in industry or other areas, but referring to all of them collectively is like asking why should I go see a lawyer when many are trial lawyers or litigators that virtually never deal with tax or estates? In any case, I don't believe even lawyers you go see to handle your will and the like will have as much experience dealing with tax as your typical CA in public practice, but I'll admit I don't regularly use a lawyer, nor are they typically as affordable as a CA.
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May 23, 2013
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aquariaguy wrote: If only we could afford one share. I wonder how many people own just one share. Are you even allowed to buy just one ?
You're probably thinking of the BRK.A shares, the BRK.B that lemieux035 mentioned are less than 1/1000th the price. And even with the BRK.A shares, I'm sure you can buy just one as long as someone is willing to sell just one. I recall being told that people in the past did so largely just to get the annual reports written by Buffett, before they were readily available online.
Jr. Member
Feb 6, 2014
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Vancouver
aquariaguy wrote: If only we could afford one share. I wonder how many people own just one share. Are you even allowed to buy just one ?
You're thinking of BRK.A (closing price $182,175) but he means BRK.B (closing price $121.20) which represents 1/1500th of a class A share.
Deal Addict
May 7, 2006
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1. I found out my FA changed the funds from A to F class funds so the MER fell from 2.5% to 1.5% (the 1.5% is tax deductible also he said).
They're no fee for withdrawing these funds. He said he had a gain of 8% over 1 year and 15% since 2009.

2. I was wondering, if there's only a $10 fee to withdraw funds from TD Waterhouse self-managed investing, and say another company charges $400 per withdrawal, can you just transfer everything to the TD Waterhouse account and save the fees (minus the $10 fee) for withdrawal?

Thanks
Deal Addict
May 7, 2006
2372 posts
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Toronto
bump if anyone can answer these questions, your help is much appreciated
aokec wrote: 1. I found out my FA changed the funds from A to F class funds so the MER fell from 2.5% to 1.5% (the 1.5% is tax deductible also he said).
They're no fee for withdrawing these funds. He said he had a gain of 8% over 1 year and 15% since 2009.

2. I was wondering, if there's only a $10 fee to withdraw funds from TD Waterhouse self-managed investing, and say another company charges $400 per withdrawal, can you just transfer everything to the TD Waterhouse account and save the fees (minus the $10 fee) for withdrawal?

Thanks
Member
May 23, 2013
220 posts
67 upvotes
aokec wrote: 1. I found out my FA changed the funds from A to F class funds so the MER fell from 2.5% to 1.5% (the 1.5% is tax deductible also he said).
They're no fee for withdrawing these funds. He said he had a gain of 8% over 1 year and 15% since 2009.
AFAIK, MERs are not typically tax deductible, but from what I've seen F class funds don't technically have an MER and the fee there is charged separately, should be tax deductible. I can't say that is conclusively the case across the board however, so ultimately I would have someone knowledgeable actually take a look. As for the return, not only does 15% since 2009 not sound that great (collectively the whole market has gone up quite a bit more than that since 2009, or do you mean per year?), but I'm always wary of people quoting past performance of stocks/funds as if it is the best indicator of future success. I'm not sure if looking into the fund details would help you at all to determine if it is a good fund, but hopefully at the very least the fund matches your risk profile and such; if you're not too sure what to look for or have an opinion on what you do or don't want, you're effectively at the mercy of the advisor on what to choose, and hopefully you trust him.
aokec wrote: 2. I was wondering, if there's only a $10 fee to withdraw funds from TD Waterhouse self-managed investing, and say another company charges $400 per withdrawal, can you just transfer everything to the TD Waterhouse account and save the fees (minus the $10 fee) for withdrawal?
Can you be more specific about when a company would be charging you $400 per withdrawal? That seems awfully high, and if you're already with TD are you talking about redeeming units of a mutual fund rather than withdrawing from a company? Otherwise, if you have an account with a different financial institution (say, CIBC), you would have to pay whatever fee they may charge to transfer your holdings to TD and then with it there, you would be subject to the TD withdrawal fees. I have a feeling this isn't quite the answer to the question you intend to ask however.

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