• Last Updated:
  • Feb 17th, 2021 10:39 pm
[OP]
Deal Addict
Feb 10, 2006
2293 posts
307 upvotes
Kitchener

Financial planner

I am looking for an investment company/planner. Currently I am with investors group, and I am not happy with that organization. I was pleased with a gentleman at Edward Jones but he retired years ago.

I was thinking about going to national Bank since they have my mortgage but before I do I was curious if there are better options.
7 replies
Deal Addict
User avatar
May 11, 2014
4413 posts
5149 upvotes
Iqaluit, NU
Before you go with anyone, what exactly are you looking for in terms of financial planning? Places like Edward Jones, IG or the bank aren't necessarily there to help to "plan." They may give you generic advice and sell you financial products.

Depending on the amount of assets you have, going with a fee-only advisor that is independent of firm is a good choice. The reason for this is that when you go to a specific firm, the firm sells you products to compensate themselves. Going to IG et al., you pay MERs that are 2-2.5% each year to cover their costs and compensate them. It's their way to earn a commission. The problem with that is these fees reoccur every year. Going to a fee-only, you have an upfront cost. This can cost $2-3k easily, but think about it. If say you have $100k in assets, that is 2-3% one-time. These advisors can access Series F mutual funds or low cost investments that are not only solid choices, but are low fee to you. The fund choices are also based on your needs as they are being compensated by their fee so there is less (likely) pressure for them to sell you a product to earn a commission. Series F and other low costs funds are often less than 1%, and with enough assets can save you much more over time.

If you do not have a large number of assets, are young and are just merely accumulating funds, going with low-cost self service options are likely better. Self-service options are not difficult and are effective in terms of accumulating wealth first. There are a ton of resources, including RFD in how to scale your situation.

Regardless, feel free to post your situation. if you can state your general networth, funds you have invested, debts, age, income, and financial goals here, you can have at least some ideas what you can do and so you have some ideas of what is out there based on responses so that before you go to IG, Edward Jones etc. you have an idea of what competitor options are so you can help protect yourself from bad sales.
Support your local Credit Union!

Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
[OP]
Deal Addict
Feb 10, 2006
2293 posts
307 upvotes
Kitchener
xgbsSS wrote: Before you go with anyone, what exactly are you looking for in terms of financial planning? Places like Edward Jones, IG or the bank aren't necessarily there to help to "plan." They may give you generic advice and sell you financial products.

Depending on the amount of assets you have, going with a fee-only advisor that is independent of firm is a good choice. The reason for this is that when you go to a specific firm, the firm sells you products to compensate themselves. Going to IG et al., you pay MERs that are 2-2.5% each year to cover their costs and compensate them. It's their way to earn a commission. The problem with that is these fees reoccur every year. Going to a fee-only, you have an upfront cost. This can cost $2-3k easily, but think about it. If say you have $100k in assets, that is 2-3% one-time. These advisors can access Series F mutual funds or low cost investments that are not only solid choices, but are low fee to you. The fund choices are also based on your needs as they are being compensated by their fee so there is less (likely) pressure for them to sell you a product to earn a commission. Series F and other low costs funds are often less than 1%, and with enough assets can save you much more over time.

If you do not have a large number of assets, are young and are just merely accumulating funds, going with low-cost self service options are likely better. Self-service options are not difficult and are effective in terms of accumulating wealth first. There are a ton of resources, including RFD in how to scale your situation.

Regardless, feel free to post your situation. if you can state your general networth, funds you have invested, debts, age, income, and financial goals here, you can have at least some ideas what you can do and so you have some ideas of what is out there based on responses so that before you go to IG, Edward Jones etc. you have an idea of what competitor options are so you can help protect yourself from bad sales.
Hello, and thank you for the suggestion.

I am 45yrs old and ideally want to retire in 13 yrs. I am not sure how realistic that is. I have a little over 500k put in to investments. Some rrsp, funds, and pensions from past employers. Zero in tfsa however.

I own a couple of properties. My primary home and a cottage that has two houses. The smaller house at the cottage is currently rented out to long term tenants. If I liquiditated these I would expect to have another 700k after repaying the mortgage.

My only debt is my car. I signed up for an 8yr loan for a tesla.

Current salary is approximately 130k with bonus.

I'm married and she makes about 60k and won't save a penny in the next 13 yrs.
Deal Addict
User avatar
May 11, 2014
4413 posts
5149 upvotes
Iqaluit, NU
Double_J wrote: Hello, and thank you for the suggestion.

I am 45yrs old and ideally want to retire in 13 yrs. I am not sure how realistic that is. I have a little over 500k put in to investments. Some rrsp, funds, and pensions from past employers. Zero in tfsa however.

I own a couple of properties. My primary home and a cottage that has two houses. The smaller house at the cottage is currently rented out to long term tenants. If I liquiditated these I would expect to have another 700k after repaying the mortgage.

My only debt is my car. I signed up for an 8yr loan for a tesla.

Current salary is approximately 130k with bonus.

I'm married and she makes about 60k and won't save a penny in the next 13 yrs.
I would need a bit more information in terms of the actual accounts here. How is your $500k split up? Are any of your accounts spousal RRSPs in your wife's name? What interest rate are you paying on your Tesla loan? And how much can you save each month?

Some good news is that you are doing fairly well in terms of income, assets and debt. That being said, you do have a mortgage. You should still consider your mortgage as par of your debt. Yes, you would have positive equity after selling, but homes are not easily liquid. How much balance do you have left on it and what is the current interest rate you pay on it?

A few things I can tell you. Your focus on the RRSPs makes sense in that you are somewhat higher income. For each dollar of an RRSP contribution, you are getting around 45c back which is quite a bit
https://www.taxtips.ca/taxrates/on.htm

Now seeing that you have focus on RRSPs and property but having used your TFSA is a bit concerning. I see some risks in your strategy here. Since RRSPs are taxable upon withdrawal, and your second property can trigger a lot of capital gains upon your death, you do need to consider the fact you lack tax-free cash sources. So while you are in the income bracket where RRSPs make sense, I would say you should maximize you and your wife's TFSA's as building that cash free tax source is going to be important. Additionally, you should consider splitting up your RRSP with your wife's spousal RRSP. Because of your income disparity and upon retirement, you would see a difference in income. Try aiming to equalize the RRSP amounts so as to minimize your taxable income on. If you were to have all the RRSPs in your name, it is taxed in one name whereas splitting the RRSP balances helps to reduce the tax burden by splitting the income. So if you notice in the Ontario tax bracket link I sent you, say you wanted to withdraw $90k from your RRSP. You would pay portions at 20.05% and upto 31.45%. But if this was split between $45k with you and your spouse, the entire amount is taxed at 20.05%.

That being said, the fact you are stating your wife won't save anything is a bit concerning in that it seems she is totally dependent on you. That is fine, but it does change the conversation. Does your wife have assets in her name as well? Does she have work benefits (eg. pension etc.)?

Retirement will depend on how much you are budgeting for. What kind of lifestyle and costs are you seeing here? This will ultimately determine how much you would need to save.

Since you do have 13 years of work left, you are starting to get to the point of having to consider lowering your risk in your investments. Depending on where you are at, I would still try to have a fairly growth or aggressive portfolio. I would probably take the amount you would dedicate toward fixed income and bonds and increase your debt repayment especially your car loan. Has your advisors mentioned the portfolio they have set for you? What kind of risk tolerance do you have?

Let's say you have a 75% equity, 25% fixed income portfolio. One consideration is to take 25% and use that to pay off your loans because paying off your loan early is like making a guaranteed tax-free interest investment. By reserving your tax-sheltered investment room for equities, this allows you to reserve it for higher growth equity investments which may be more tax efficient.

If you could answer some of the questions especially the funds you are invested in and what accounts, I could take a closer look at how your investments are set up.

One thing I can say is at around $500000, you may want to consider a fee-only advisor. As an example, IG might sell you something like this
https://www.morningstar.ca/ca/report/fu ... 0P0000KS4D
https://www.investorsgroup.com/en/inves ... lio-growth

If IG had you invested in this fund, you would be paying 2.75% MER for this investment every year. That is $13750 in management fees per year. A fee-only advisor, you would pay a few thousand dollars for the few times you see them, but it is the one bill and one bill only (unless you ask to meet again). Many of them would see you a Series F advisor fund such as these...
https://funds.dynamic.ca/fundprofiles/en-US/H64Q/F/CAD
https://www.fidelity.ca/fidca/en/products/gp?series=f

At 0.9-1.0%, this significantly cuts the fees on investments to about $5k a year.

Series F are sold by advisors. You will notice the management fees are much lower. So since you paid the advisor for their advice, they are not making money (generally) on commission. They can help by picking the most appropriate fund without having you pay a recurring management fee each year. Most fee-only planners would be OK selling you funds from different companies and not forced to sell you a fund from their own house.
And if you were to go the self-directed approach if you notice the fund in my signature
https://www.saskpension.com/wp-content/ ... cts-BF.pdf
or
https://www.blackrock.com/ca/individual ... -en-ca.pdf

the fees are even much lower. Keep in mind performance is not just about fees, but they do make a huge difference. And if I am going to be paying someone to help plan my financial future, I want their investment choice to be based on the best funds they believe will help me get there, not the ones they are forced to select or ones that pay them the highest commission.

Of course, you can also go the self-directed route too.
Last edited by xgbsSS on Feb 17th, 2021 10:42 pm, edited 1 time in total.
Support your local Credit Union!

Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
Deal Addict
User avatar
Dec 16, 2015
2506 posts
2172 upvotes
Canada
Seek a WSB Charterholder for superior returnsRocket
To the moon
Newbie
May 9, 2018
57 posts
33 upvotes
The guy I've been with for 15 years joined this group just over 2 years ago, from one of the big banks. Check out the history of the founders and you'll find they build great organizations in this space.

https://wellington-altus.ca/

I've done a plan and had it updated each year I've been with him at this firm (he doesn't do the planning, they have dedicated in house staff for that). They also have in house economists that provide insight and bring in guest speakers (Met Kathrine wood though a presentation done by my advisor). Next week we have a couple of zoom calls on tax season (home office deductions VS the easy method).

I'd follow my guy wherever he goes as he's taken care of my family, but he's never been happier since joining this company and I hear from him way more frequently as he doesn't appear to be under the same pressure and constraints put on these guys as the banks apply. He's happier and my level of service is awesome. Best of luck in your search.
Member
Apr 20, 2011
285 posts
32 upvotes
Toronto
xgbsSS wrote: Before you go with anyone, what exactly are you looking for in terms of financial planning? Places like Edward Jones, IG or the bank aren't necessarily there to help to "plan." They may give you generic advice and sell you financial products.

Depending on the amount of assets you have, going with a fee-only advisor that is independent of firm is a good choice. The reason for this is that when you go to a specific firm, the firm sells you products to compensate themselves. Going to IG et al., you pay MERs that are 2-2.5% each year to cover their costs and compensate them. It's their way to earn a commission. The problem with that is these fees reoccur every year. Going to a fee-only, you have an upfront cost. This can cost $2-3k easily, but think about it. If say you have $100k in assets, that is 2-3% one-time. These advisors can access Series F mutual funds or low cost investments that are not only solid choices, but are low fee to you. The fund choices are also based on your needs as they are being compensated by their fee so there is less (likely) pressure for them to sell you a product to earn a commission. Series F and other low costs funds are often less than 1%, and with enough assets can save you much more over time.

If you do not have a large number of assets, are young and are just merely accumulating funds, going with low-cost self service options are likely better. Self-service options are not difficult and are effective in terms of accumulating wealth first. There are a ton of resources, including RFD in how to scale your situation.

Regardless, feel free to post your situation. if you can state your general networth, funds you have invested, debts, age, income, and financial goals here, you can have at least some ideas what you can do and so you have some ideas of what is out there based on responses so that before you go to IG, Edward Jones etc. you have an idea of what competitor options are so you can help protect yourself from bad sales.
and how would someone find a fee-only advisor?
Deal Addict
User avatar
May 11, 2014
4413 posts
5149 upvotes
Iqaluit, NU
hyph3n wrote: and how would someone find a fee-only advisor?
It can be difficult to find a good one. Fee-only advisor is not a protected title, so it would be important to ask what they charge, how they are paid, and whether they offer funds. If they do offer funds, you ask what type of funds they offer and what series they can offer from these funds. Some do not offer investments and these ones can direct to where and what to buy.

Someone did start compiling a directory of fee-only advisors. Keep in mind you should still look and see reviews, ask questions about their fee structures etc.
https://docs.google.com/spreadsheets/d/ ... edit#gid=0

And always keep to the adage that there will always be good or bad advisors regardless of commission or fee based.
Support your local Credit Union!

Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222

Top