Investing

RBC advertisment: "Well I guess low fees aren't everything!"

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  • Aug 24th, 2021 7:51 pm
[OP]
Sr. Member
May 5, 2006
895 posts
351 upvotes

RBC advertisment: "Well I guess low fees aren't everything!"

This ad irritates me every time I see it.


Clueless man: How come you're doing better than me when my accounts have lower fees?
Smug woman: I guess my advisor was right. Fees don't tell the full story.
See the difference performance makes.

They didn't have the guts to leave comments open on this.

Sure, RBC. Fees don't tell the whole story, they're just a small part of the actively managed funds trailing the market: https://www.spglobal.com/spdji/en/resea ... /#/reports

But I'm sure they'd rather cherry pick specific funds that have survivor-biased their way through the last 20 years.
47 replies
Member
Jan 24, 2013
484 posts
449 upvotes
Rainy River
I didn't like the ad either as I'm sure if you took 50 DIY self-directed investors and compared it to the advisor probably 40 out of 50 of the DIY people at least beat the RBC advisor.
Member
Sep 27, 2009
265 posts
250 upvotes
Toronto
Yeah, that ad bothers me too. They are targeting busy/lazy/ignorant investors? Most so called "advisors" are clueless about investing. They will stick most of their clients with funds from their own company or funds with the highest commission. Some years they will get lucky and their recommendations will do well but over the long run, they will be not be able to beat the index.
Deal Expert
Jan 27, 2006
20513 posts
13895 upvotes
Vancouver, BC
Realistically, all investment ads are sales ads so I'm not troubled by the ad in the least.

In fact, I welcome the ad as it helps open up the discussion not just about fees, but other things that can and do affect returns like asset allocation, risk profiles, and other factors. The ad is not an active vs passive debate as some may make it out to be...
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Dec 12, 2009
25143 posts
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Toronto
As an RBC shareholder, I like it when ads like this work.
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Deal Addict
Sep 2, 2009
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retireyoung55 wrote: I didn't like the ad either as I'm sure if you took 50 DIY self-directed investors and compared it to the advisor probably 40 out of 50 of the DIY people at least beat the RBC advisor.
I agree. The only concession I will make is that funds are at the mercy of turnover while individuals are not.

Even more reason though not to go with an advisor if you can avoid it.
Last edited by cloak on Aug 19th, 2021 10:38 pm, edited 1 time in total.
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Sep 21, 2007
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Winnipeg
LOL. Here's the thing, we need people to put money with advisors, why? because if everyone was self directed and beat all them, we the DIY'ers won't be ahead of the game from those people.. We NEED people do go with them so we can get ahead.
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Nov 1, 2001
1150 posts
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Toronto
randomthoughts wrote: This ad irritates me every time I see it.


Clueless man: How come you're doing better than me when my accounts have lower fees?
Smug woman: I guess my advisor was right. Fees don't tell the full story.
See the difference performance makes.

They didn't have the guts to leave comments open on this.

Sure, RBC. Fees don't tell the whole story, they're just a small part of the actively managed funds trailing the market: https://www.spglobal.com/spdji/en/resea ... /#/reports

But I'm sure they'd rather cherry pick specific funds that have survivor-biased their way through the last 20 years.
I just replay those questrades ad to make me feel better
Deal Fanatic
Apr 25, 2006
7809 posts
2884 upvotes
Ad justifies the fees and still gets the customer.

It's like saying, I am small but perform well; let's get married.
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Sep 2, 2009
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faken wrote: LOL. Here's the thing, we need people to put money with advisors, why? because if everyone was self directed and beat all them, we the DIY'ers won't be ahead of the game from those people.. We NEED people do go with them so we can get ahead.
More people can do better. It is not a zero sum game.
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Dec 12, 2009
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faken wrote: LOL. Here's the thing, we need people to put money with advisors, why? because if everyone was self directed and beat all them, we the DIY'ers won't be ahead of the game from those people.. We NEED people do go with them so we can get ahead.
That is a good way of looking at the situation. I really get a kick out of the older callers into BNN market call asking about the next hot stock. Imagine a retiree doing active investing. Hopefully it is with just the play money.

The chart in this link is a bit old but should give an idea where we stand with active investing at least in the US. Call it 50/50 based on asset value. I believe Canada is way behind compared to the US and it is evident by the number of ETFs available in this country vs the US.

https://www.cnbc.com/2019/03/19/passive ... arket.html
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Dec 31, 2018
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retireyoung55 wrote: I didn't like the ad either as I'm sure if you took 50 DIY self-directed investors and compared it to the advisor probably 40 out of 50 of the DIY people at least beat the RBC advisor.
Are you sure about that? I am DIY and I realize theoretically most passive funds should beat active management; however, market timing can be a massive issue for the DIYers.
The superior performance only comes through if you are disciplined and get the full performance of your fund. I realize you can market time with an advisor as well, but it can be argued that part of an advisor's value is helping you stay put.
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May 11, 2014
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The guy in the ad could be using a random roboadvisor that uses electronic KYI questions and that places the client in less risk than they probably should. The roboadvisor fee is also another fee ontop of the MER the ETFs charge.

While I'm no fan of the retail funds that RBC generally peddles to clients, the core of the ad's argument is actually a good point.
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retireyoung55 wrote: I didn't like the ad either as I'm sure if you took 50 DIY self-directed investors and compared it to the advisor probably 40 out of 50 of the DIY people at least beat the RBC advisor.
I'd challenge the 40 out of 50 DIY would beat a bank advisor. I'll assume a 8% return minus 2.5% in fees so around 5.5% over the last 10 years. This is objectively terrible for the last 10 years.

The people I talk to in real life when they're talking stocks its normally completely speculative stuff. Penny stocks, high yield, gamestop, weed and crypto but its normally right near the peak and then I don't hear about it again. Maybe on RFDs but I'd be surprised if most are getting 5.5%...
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Chance7652 wrote: I'd challenge the 40 out of 50 DIY would beat a bank advisor. I'll assume a 8% return minus 2.5% in fees so around 5.5% over the last 10 years. This is objectively terrible for the last 10 years.

The people I talk to in real life when they're talking stocks its normally completely speculative stuff. Penny stocks, high yield, gamestop, weed and crypto but its normally right near the peak and then I don't hear about it again. Maybe on RFDs but I'd be surprised if most are getting 5.5%...
I'd be surprised if most are above water.
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Jan 27, 2006
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xgbsSS wrote: The guy in the ad could be using a random roboadvisor that uses electronic KYI questions and that places the client in less risk than they probably should. The roboadvisor fee is also another fee ontop of the MER the ETFs charge.

While I'm no fan of the retail funds that RBC generally peddles to clients, the core of the ad's argument is actually a good point.
Yep. If you just look at the message itself and not the fact that it's from any particular financial institution, the message is right on track - do your homework and understand exactly what goes into one's return.
Member
Feb 27, 2011
221 posts
219 upvotes
Chance7652 wrote: I'd challenge the 40 out of 50 DIY would beat a bank advisor. I'll assume a 8% return minus 2.5% in fees so around 5.5% over the last 10 years. This is objectively terrible for the last 10 years.

The people I talk to in real life when they're talking stocks its normally completely speculative stuff. Penny stocks, high yield, gamestop, weed and crypto but its normally right near the peak and then I don't hear about it again. Maybe on RFDs but I'd be surprised if most are getting 5.5%...
Yeah, I'm always surprised how quickly a lot of novice investors I know seem to jump straight from a HISA to alternative investments like private mortgage lending, etc. And that's not even counting those who have crypto holdings yet no TFSA or RRSP. They like bragging about the $600 windfall they made on penny stocks, etc. but if you push them a bit more, they inevitably end up admitting that they are happy just to break even (on aggregate).

On the flipside, my Boomer uncle never fails to thank me for getting him out of high MER mutual funds and into ETFs, against the recommendation of his CIBC adviser (with an "er"). His actual portfolio holdings are more or less the same as before, just his MER has dropped 2% annually.
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costaguana wrote: On the flipside, my Boomer uncle never fails to thank me for getting him out of high MER mutual funds and into ETFs, against the recommendation of his CIBC adviser (with an "er"). His actual portfolio holdings are more or less the same as before, just his MER has dropped 2% annually.
I'm not a big fan of giving investing advice or stock picks with most people I know in real life. I gave some advice to my wife parents in Dec 2019 and I felt really bad that the stocks went down even though it was what I was also buying. I think I gave them 5 ideas including a US index fund and they bought T and TD from that. Its worked out in the end but at one point they would have been probably been down 40% like I was. I'd hate to have someone blame me when what they're funds for retirement go down.

While its not what I do, I think most people would be best served investing in something like VBAL or VGRO depending on their risk tolerance. I think temperament probably has a bigger effect than strategy with your returns as they're less likely to sell in a crash.

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