Investing

Where to invest a chunk of money with minimal knowledge

  • Last Updated:
  • Nov 18th, 2019 6:34 am
[OP]
Member
Jul 23, 2005
221 posts
23 upvotes
Toronto

Where to invest a chunk of money with minimal knowledge

Is something like wealthsimple the way to go? Would meeting with them be any better than my bank's financial advisor or an independent advisor. I really don't have the time or wherewithal to get up to speed on all the investment possibilities and their shortcomings. I have some rrsp already at my bank and am coming into a chunk of money that I want to invest in wisely that I don't need to actively manage. Who can I go to for an honest way forward?
37 replies
Deal Addict
Nov 9, 2013
4334 posts
4381 upvotes
Edmonton, AB
I think a roboadvisor would be a great way to go.

I would steer clear of an advisor at a bank - you'll likely get poor advice and it'll be expensive and not worth the time.
Keep calm and go long
Deal Fanatic
Feb 4, 2015
7336 posts
3470 upvotes
Canada, Eh!!
Get some knowledge first... it's your hard earned money so spend few minutes reading on couch potato, index investing, growth investing. I personally use hybrid approach and employ several strategies BUT find what comfortable with... you might end up buying individual stocks, etfs like vgro, low fee index funds, etc.

Some threads on rfd as well like ccp investing, dividend growth, etc. Plus many knowledgeable folks... read a bit while having morning coffee, lunch, etc.

Agree to stay clear of advisors where they are making money via fees.
Selling Viking 7 winters on steel wheels. Good for Subaru and some Chevrolet, Dodge, Ford, Jeep, Lexus, Toyota. Almost New, less then 1k kms used.

viking-contact-7-winter-tires-steel-wheels-2507125/
Deal Guru
Feb 9, 2009
11722 posts
10250 upvotes
Dividend investing in blue chips is best for above average returns.

Index investing is the easiest and you can never be more worse off than the market.
[OP]
Member
Jul 23, 2005
221 posts
23 upvotes
Toronto
I spent the morning reading different websites take on the all the main roboadvisors on offer. They each seem to have a selling point that would appeal to me, I'm a older than the target marker of Wealthsimple but I like what I'm hearing about what they offer. Would it be prudent not to move everything to them? although it seems like hitting certain investment amounts gets you better service and rates.
Deal Addict
Dec 6, 2017
1298 posts
812 upvotes
Manitoba
Put in HISA while you study and figure out where to invest it in.
Deal Addict
User avatar
Nov 18, 2007
3514 posts
619 upvotes
Corktown
If you are comfortable with using a discount brokerage platform, why not consider VGRO, XGRO or ZGRO or other all-in-one products that would be appropriate for your investment needs, goals and risk?
Member
Mar 6, 2017
383 posts
262 upvotes
hwshi wrote: I spent the morning reading different websites take on the all the main roboadvisors on offer. They each seem to have a selling point that would appeal to me, I'm a older than the target marker of Wealthsimple but I like what I'm hearing about what they offer. Would it be prudent not to move everything to them? although it seems like hitting certain investment amounts gets you better service and rates.
you should also speak with some advisors... I know a lot of people think they're a waste but I feel a lot of people think when they hire an advisor its just to pick the right investments to make the most money but unfortunately even the most successful hedge funds and investors have a tough time with that.

A good advisor will tailor the investments to your needs and timeline along with maxing out your tax benefits and stuff like that. I find even if you're making a lot of money on your investments you can leave a lot of money on the table by not having the right accounts or buying at the proper time etc... and that's when a good advisor comes in to make sure everything is in order and your benefits are maxed out
Newbie
Nov 11, 2019
17 posts
8 upvotes
Toronto
hwshi wrote: Is something like wealthsimple the way to go? Would meeting with them be any better than my bank's financial advisor or an independent advisor. I really don't have the time or wherewithal to get up to speed on all the investment possibilities and their shortcomings. I have some rrsp already at my bank and am coming into a chunk of money that I want to invest in wisely that I don't need to actively manage. Who can I go to for an honest way forward?
Honestly I recommend Random Walk Down Wall Street as a starter guide. You will spend a few hours reading but come out a lot more knowledgeable and ready to take the plunge. It's probably not as difficult as you think. I avoid robos because I still think the fees are not worth it.
Deal Addict
Jul 23, 2007
4558 posts
3215 upvotes
I've always been a DIY investor and now keep things simple for investing. An emergency fund in a HISA. Index funds in the RRSP's and TFSA's. Individual Canadian dividend growth stocks in the taxable account in order to build a growing income stream over time. I don't spend a lot of time at this and neither should you OP, if you don't want to. Try and keep costs and portfolio turnover as low as possible, and I'm sure you'll do just fine over an investment lifetime.
Deal Fanatic
Feb 15, 2006
8982 posts
3542 upvotes
Toronto
Since you are beginning to learn, there is no harm in talking to some bank advisors. They'll ask questions about your time horizon, risk tolerance, amount to invest/withdraw, family/tax situation, vs your other assets/wealth. This way you'll learn what are the factors to consider.

Many people in RFD have strong opinions against investing with bank advisors. But there's a reason many people do invest with the banks or other financial institutions, especially for high networth people who can get private banking, private investment counsels, etc.
Newbie
Nov 11, 2019
17 posts
8 upvotes
Toronto
Arrgh wrote: Since you are beginning to learn, there is no harm in talking to some bank advisors. They'll ask questions about your time horizon, risk tolerance, amount to invest/withdraw, family/tax situation, vs your other assets/wealth. This way you'll learn what are the factors to consider.

Many people in RFD have strong opinions against investing with bank advisors. But there's a reason many people do invest with the banks or other financial institutions, especially for high networth people who can get private banking, private investment counsels, etc.
What is the reason for HNW to go to a bank "advisor" especially if they got to HNW through years of disciplined investing? Much as they could be useful to beginners, many of them are also mistaken on fundamental issues or try to push you high-fee mutual funds because of commission structure. Some of them have a shoddy understanding of the markets, especially when you get into more nuanced discussions around bonds, sector funds etc. I think if you talk to an advisor, you DO need to go in with the principle that you are not going to buy anything from them on first visit.

I speak from a perspective of serious early opportunity costs as a result of these advisors. I invested in MFs at ~2% MERs and GIC-style RRSPs. It probably has cost me in compounded returns now approximately 40-50k.
Deal Fanatic
User avatar
Sep 1, 2013
6198 posts
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Just to add to what @Rodmack61 wrote above:

https://www.lowestrates.ca/news/bank-em ... vice-25082
Canadian bank employees are regularly pushing products and services on customers that they don’t need just to meet sales targets, a new report confirms.

Last year, a CBC investigation found that Canadian banks were upselling or even tricking customers into buying financial products, prompting a number of government agencies to investigate the alleged misconduct.

A report released Tuesday by the Financial Consumer Agency of Canada (FCAC) confirmed that it too found that banks place substantial pressure on employees to sell, increasing the risk that employees will mislead customers in order to meet targets, or force financial products that do not make sense for customers.
You are better off buying the stock of the banks who are doing this - this way you get a cut of the profits they are making off the other suckers who buy what the bank "advisor" recommends.
Deal Fanatic
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Sep 1, 2013
6198 posts
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Sanyo wrote: Dividend investing in blue chips is best for above average returns.
You could probably choose a start and end period in the past to demonstrate that this strategy delivered above market returns, but, of course, past performance not indicative of future results.

I think it is reasonable to say that the OP should avoid any kind of active/stock picking strategy if he doesn't have the time/motivation to put into it.
Deal Fanatic
Feb 15, 2006
8982 posts
3542 upvotes
Toronto
Rodmack61 wrote: What is the reason for HNW to go to a bank "advisor" especially if they got to HNW through years of disciplined investing? Much as they could be useful to beginners, many of them are also mistaken on fundamental issues or try to push you high-fee mutual funds because of commission structure. Some of them have a shoddy understanding of the markets, especially when you get into more nuanced discussions around bonds, sector funds etc. I think if you talk to an advisor, you DO need to go in with the principle that you are not going to buy anything from them on first visit.

I speak from a perspective of serious early opportunity costs as a result of these advisors. I invested in MFs at ~2% MERs and GIC-style RRSPs. It probably has cost me in compounded returns now approximately 40-50k.
There's a reason many HNW people use banks to manage their wealth, and continue to do so, rather than DIY.

Bank advisors are not just those junior persons sitting in the bank branches. There are many people in the bank working on finance and wealth management, in addition to those front line staff. Banks also have many levels of "advisors". If you have enough to invest, you can also have access to pooled funds (0 MER) or many other instruments not available to the retail investors who only want to invest small change.

Anyway, many in RFD have the attitude they know best and just dismiss or trash all other financial advisors. OTOH, Canadian banks do invest or manage a lot of money (many deal with hundreds of billions, not small change) and have done a pretty good job.
Newbie
Nov 11, 2019
17 posts
8 upvotes
Toronto
Arrgh wrote: Bank advisors are not just those junior persons sitting in the bank branches. There are many people in the bank working on finance and wealth management, in addition to those front line staff. Banks also have many levels of "advisors". If you have enough to invest, you can also have access to pooled funds (0 MER) or many other instruments not available to the retail investors who only want to invest small change.
Sure, your point is hard to deny, but they are also hardly the "advisors" that the OP would get to speak to on their first shot at investing. In fact the majority of Canadians will never deal above the level of a junior FSR period. And if you're gonna go down this path, you may as well add in that yea, VC, PE, HF, leveraged "all-weather" etc, none of that is available to the avg retail investor. I think the UHNW get their above-market returns mostly from the higher risks that these vehicles are willing to bear, not necessarily by virtue of their exclusivity of access.

And I advocate for DIY, or at least KYS (Know your sh..) not because I don't see value in professional wealth management, but I believe people should empower themselves to understand the market before getting in. It's like due diligence that you'd do before purchasing any good or service. This makes the marketplace more fair and more competitive, imo.
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Sep 1, 2013
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Arrgh wrote: If you have enough to invest, you can also have access to pooled funds (0 MER) or many other instruments not available to the retail investors who only want to invest small change.
1. What are the long term returns on these 'pooled funds' with 0 MER?
2. What other instruments are made available only to HNW investors at banks, and what are their long terms returns?
3. How much do you need to invest to get access to above?
[OP]
Member
Jul 23, 2005
221 posts
23 upvotes
Toronto
A bit more info, I'm in my 50's. Most of my money investing has been put into my Toronto home, it was my way of forced savings. I have less than 4 years left of payment depending on the rate (I'm variable). My partner and myself also have a condo we recently took possession of and are renting out. I already have an RESP set up for my daughter and a negligent RRSP for myself, mostly to defer taxes, all at BMO. I've come into a chunk of cash due to a family member passing away. I'm happy to have it make a return and not have to manage it, honestly I just don't have the time or inclination (I know it's my money and no one else will care as much as me) . I just don't want to be suckered or be paying a bunch of fees. I like the idea of seeing what's going on with my investment in an easy to understand way (from what I understand wealthsimple does this well). I've also read BMO has a nice balance of the two robo/real person but the fees seem quite a bit more than wealthsimple.

Already from what's going on in this thread it's acronym hell ( don't take that wrong I appreciate all the opinions and advice) and something I'd really need to dedicate time to learn the ins and outs of. All things I could overcome and learn, but right now I'm going to get some money I need to deal with and having it sit in a savings account seems ridiculous.
Deal Fanatic
Feb 15, 2006
8982 posts
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Toronto
CheapScotch wrote: 1. What are the long term returns on these 'pooled funds' with 0 MER?
2. What other instruments are made available only to HNW investors at banks, and what are their long terms returns?
3. How much do you need to invest to get access to above?
Depends on the bank. Some require $500k to start, some more. The pooled funds also depend on the type, some are international or global, some Canadian and some US. Some life insurance companies offer pooled funds with low MER, not 0. The performance of those funds are on par with other mutual funds or better.

The offering can depend from bank to bank, for example TD offers private debt.

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