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Not Happy w advisor but not sure of next steps

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  • Jul 16th, 2015 5:43 pm
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[OP]
Newbie
Sep 7, 2010
37 posts
2 upvotes

Not Happy w advisor but not sure of next steps

I've been with my financial advisor since I was about 18 and I'm now 36. I started out with RRSP's and Life/Critical Illness Insurance. The insurance is universal, not term.

I've been paying about $35/month for the insurance and over the past several years that has amassed approximately $500 cash surrender value. To me, that's useless and pointless.

I now have kids, and my wife works in healthcare so she sees sick people all the time, many of whom - even though we live in Canada - have a tough go financially when they are sick. Because of this, she sees the value in illness insurance and she's also big on life insurance for our kids. "No one should have to pay $10k in the event their kids die - that's just another worry". She also believes that it's easier to buy now and keep forever as opposed to trying to get it when you're 35 and have some kind of illness.

I'm normally the type of person that researches this stuff until I'm blue in the face but when it comes to insurance and investing I'm not my normal, OCD self.

We now have two kids, RRSP's, RESP's, a TFSA and a small account with some stock (about $5k). The last time we met with our advisor she suggested we buy even more insurance, and this was the last straw for me. At this point, I've almost lost track of what it is I'm doing with this person and to be perfectly honest, I'm tempted to go the route of just setting up self serve accounts on TD Canada Trust's website.

I'm big into convenience and most of these advisors work out of small offices where you can't update payment amounts or provide lump sum payments without driving a cheque into their office.

Don't get me wrong, my RRSP's have done quite well under this person it's just - I have a great pension through work (they toss in $1.25 for every $1.00 they pay me) and I'm pulling back on the RRSP's and leaning more towards TFSA and stock.

All this I guess is to say what are the perceived benefits of using and advisor, and what do you look for in a good one? At this point I feel like they all recommend the product that they sell and you rarely get a non-biased opinion that would actually serve you - the client - the best.

It's like walking into a Goodyear tire store and asking the guy what the best tires are. Maybe Michelelin makes the best tires, but he's not going to say that, he's going to try and sell you four Goodyear's.
3 replies
Deal Fanatic
User avatar
May 11, 2014
5784 posts
7802 upvotes
Rankin Inlet, NU
I would definitely post your insurance questions on the insurance "sticky" post on the personal finance forum. There are very smart and helpful insurance pros there. What I can say though is that if you are considering more insurance to cover any hits, term is cheaper and will pay out more for less premiums. Insurance should really never be seen as an investmemt in most cases.

Personally, I dont use an advisor except to buy a term insurance policy but only out of convenience. However, there can be value in one. They generally recommend a fee-only advisor as their payment will not be based on their sale of products which introduces bias.

On your RRSP front, it is hard to assess as we have little to go on. Im assumIng the funds you have are doing OK in that they are growing. My assumption is that they are somewhat more expensive than many options out there. Index investing usIng strategies such as Canadian Couch Potato will likely beat the returns you are earning. However, you are right in that you are better off maximizing your employer. Consider transferring your RRSP from broker to a self-directed brokerage buying etfs (if you are willing to buy the etfs). If not, TD e-series is another option. If wanting to do self brokerage, start with Questrade, VB, Scotia iTrade or any brokers with free ETF purchasing first.It will be cheaper in the long run when starting out.

If you dont mind, posting the mutual fund names she has invested for you would paint a clearer picture.
Deal Fanatic
User avatar
Jun 11, 2001
9473 posts
1606 upvotes
Check with both your workplaces, you may get better deals out there and some kind of employee discounts with insurance. We get ours through my GF benefits, and our kids through mine (rate better conversely).

Investment wise... I assume this is just some "off the shelf" "advisor"... do yourself a favour and educate yourself and self driven investments, through index MFs or ETFS... and risk is just allocation between stocks/bonds ratio (and sector allocations). You'll save tons in MER and probably trailer fees and all that junk these "advisors" push.

It'll be worth your while.
...zzz...zzz...zzz...

www.heatware.com
Banned
Jun 3, 2015
5 posts
Ottawa, ON
I totally can understand your frustration with your advisor. Most of them are paid commission and their interest's always aren't aligned.

I'd recommend checking out Wealthsimple, they're an online investment management platform that has incredibly low fee's and you get access to a real portfolio manager via Skype. Everything is upfront and pretty transparent.

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