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Changing Investment Broker

thewheelman

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I'm not satisfied with my portfolio's performance with RBC Dom Sec. over the past several years.

What is the usual process for changing investment brokers?
Must I cash out completely, or can the investments be transferred?
 

Hobbyer

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They can be transferred. Otherwise, you'd be nailed taxes assuming you're actually making money (and held outside an RSP)
 
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wonkyknee

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these days..

the new broker can simply take over overnight using electronic systems. Transfering over a non-registered account could have taken 6-8 weeks just a couple of years ago. Registered plans are still paper based and can still take a few weeks but by law it supposed to be completed within 30 days i think.
 

duang

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I'm not satisfied with my portfolio's performance with RBC Dom Sec. over the past several years.

What is the usual process for changing investment brokers?
Must I cash out completely, or can the investments be transferred?
> assets can be transferred in-kind or in cash unless the assets are proprietary and can't be held by new broker.
> new broker might cover transfer costs.
> many transfers can be done over electronic system now and might only be a week or two but relinquishing institution can take up to three weeks to release assets.
> non-registered assets might incur tax liabilities if sold and transferred in cash.
> some assets can be changed over in a day or two if merely changing advisor and the assets are held in client name at an investment company. But moving assets from RBC will probably take at least a week or two [and up to four weeks] since they are probably held in nominee accounts at RBC [i.e. in RBC's name]. The assets would have to be reregistered at the new broker and this takes time even with the improved electronic transfer system.

Let me know if anything is not clear. PM me if you want.

D.
 

hinz

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> assets can be transferred in-kind or in cash unless the assets are proprietary and can't be held by new broker.
> new broker might cover transfer costs.
> many transfers can be done over electronic system now and might only be a week or two but relinquishing institution can take up to three weeks to release assets.
> non-registered assets might incur tax liabilities if sold and transferred in cash.
> some assets can be changed over in a day or two if merely changing advisor and the assets are held in client name at an investment company. But moving assets from RBC will probably take at least a week or two [and up to four weeks] since they are probably held in nominee accounts at RBC [i.e. in RBC's name]. The assets would have to be reregistered at the new broker and this takes time even with the improved electronic transfer system.
And hopefully the transfer-in institution is not another full service brokerage, say BMO Nesbitt Burns, Scotia McLeod or even CIBC Wood Gundy.

Many of the "advisers/professionals" working in those full service brokerages are simply well-dressed commissioned sales people trying to churn peoples portfolios, as long as the churning is not too frequent to trigger red flag.

For those professionals who are CFP/CFA chartered holders, they are less worse but still they charge a percentage of your asset annually, say starting 2.5% when you have at least around $500K investable amount while your adviser is receiving trailer fees, roughly as high as 1% per annum for the "investment porns" he highly recommend.

Don't get confused when your adviser suggests he or she is fee-based and transperant. It's the same as hiring an eletrician to screw in a light bulb-and then paying him or her extra fees, year after year, decade after decade for the light it produces.

The best idea though is be DIY and transfers everything to discount brokerage like TD Waterhouse or Scotia itrade and build your couch potato portfolio according to your asset allocation and location and rebalance the portfolio annually back to your original proportions.
 

wonkyknee

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one problem with DIY...

and the same problem resonates even when using brokers and that is the same psychological mistakes are made over and over and over: People tend to underperform their own investments, time and time again.

A static portfolio might produce 8-10% cmpded annually but DIY's and people acting on bad advice tend to underperform by an average of 5% per year...that's average.

The biggest problem is not fees, it is very bad decisions to get in and out, as well as asset allocation.
 

duang

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And hopefully the transfer-in institution is not another full service brokerage, say BMO Nesbitt Burns, Scotia McLeod or even CIBC Wood Gundy.

Many of the "advisers/professionals" working in those full service brokerages are simply well-dressed commissioned sales people trying to churn peoples portfolios, as long as the churning is not too frequent to trigger red flag.

For those professionals who are CFP/CFA chartered holders, they are less worse but still they charge a percentage of your asset annually, say starting 2.5% when you have at least around $500K investable amount while your adviser is receiving trailer fees, roughly as high as 1% per annum for the "investment porns" he highly recommend.

Don't get confused when your adviser suggests he or she is fee-based and transperant. It's the same as hiring an eletrician to screw in a light bulb-and then paying him or her extra fees, year after year, decade after decade for the light it produces.

The best idea though is be DIY and transfers everything to discount brokerage like TD Waterhouse or Scotia itrade and build your couch potato portfolio according to your asset allocation and location and rebalance the portfolio annually back to your original proportions.
First off, I should disclose that I work as an advisor but I like to think that like many other advisors, I can give unbiased advice that is in an client's best interests.

I subscribe to the theory that financial advice is like medical advice: it is very individual and situation specific. There is often no 'best' solution or things you have to absolutely do or don't do in my eyes: it all depends upon the person and their circumstances.

There are certainly advisors who churn accounts to their benefit and their clients detriment but I would suggest there are many more who honestly do their best for their clients first and foremost. There are many fee structures and one must make sure they understand how their advisor is compensated since the client is paying for it one way or another.

Hinz has probalby had a bad experience and is obviously cynical about the industry and he might very well do better as a DIY'r but many others might not find that the best course of action.

Comparing changing a light buld to providing financial advice is a bit simplistic unless you are talking about rolling over GIC's. What about doctors taking your temperature or the mechanic putting air in your tires? Those scammers!

DIY might very well result in lower fees if you do it right but an advisor might be able to help you save taxes; plan your estate; manage debt vs. investments; prioritize financial needs; advise on which kinds of accounts to use; make dispassionate decisions about when to buy and sell; etc.. You might pay more in fees with an advisor but many clients will net out further ahead if they benefit in the ancillary ways an advisor can help.

Many people aren't interested in financial matters or don't have the consistent time to do it themselves. Many are too emotional to be logical about their finances.

Most people could cut their own hair or change the oil on their car but is it a good use of their time or are they better off in seeking out someone to do it for them?

Hinz raises many good points but he is coming from one angle. While many investors might very well do better by themselves there are indisputably many others who would do worse following his lead and trying to do it themselves. They'll be the ones with horrible haircuts and oil-stained hands...

D.
 

hinz

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First off, I should disclose that I work as an advisor but I like to think that like many other advisors, I can give unbiased advice that is in an client's best interests.
Sure not all the advisors, be PFP/CFP/RFP/CFA/CLU are biased but the way the industry runs is full of huge conflict of interests.

It's doubtful any aspirational CFP/CFA candidate could get the designation without relevant 2-4 years work experiences after passing the exams. Getting work experiences mean preferably selling in-house manufactured financial products and/or 3rd party substitutes with trailer fees as incentives in order to meet aggressive sales targets or increase the size of the books. And for CFA candidate, he or she better helps the clients to beat the benchmark consistently to justify the compensation.

I subscribe to the theory that financial advice is like medical advice: it is very individual and situation specific. There is often no 'best' solution or things you have to absolutely do or don't do in my eyes: it all depends upon the person and their circumstances.

There are certainly advisors who churn accounts to their benefit and their clients detriment but I would suggest there are many more who honestly do their best for their clients first and foremost. There are many fee structures and one must make sure they understand how their advisor is compensated since the client is paying for it one way or another.
That's a classic when the advisor compares his or her job to GP or Specialist. It may be true both professionals participate training workshops/seminiars at 5 stars hotels or resorts sponsored by big corporations and receive free gifts as incentives to use their products but the similarities stop here.

Though it could be possible, it's remain to be seen the doctors get their financial compensation similar to the advisors, say prescribing medicine or selecting medical devices based on the amount of "trailer/DSC fees" received from Pfizer, Eli Lilly, Schering Plough, Merck, J&J, Boston Scientific, Novartis, Roche, Novo Nordisk...etc, not in the patient best interest or the side effects of the drugs/medical devices.

As far as the fee structure for doctors is concern, almost all of them, private or public practice are fee-only, not fee-based or on commission. It's remain to be seen doctors depend on their paycheque exclusively by commission received from the pharmas or restrict themselves to use in-house drugs manufactured by one pharma company only. An example could be the doctor could not prescribe Lipitor to the patients because he gets his paycheque only from Merck and Merck carries Zocor, which is cheaper but less effective. That's assuming the health insurance companies reimburse either drugs with identical amount.

Moreover, doctors involve life and death situation daily and he or she could be sanctioned severely for malpractice to the full extent of the law without much exception. Doubtful for any advisors to get sanctioned for malpractice involving financial life and death since their employers have tonnes of cash to lobby the politicans to keep the loopholes.

Hinz has probalby had a bad experience and is obviously cynical about the industry and he might very well do better as a DIY'r but many others might not find that the best course of action.

Comparing changing a light buld to providing financial advice is a bit simplistic unless you are talking about rolling over GIC's. What about doctors taking your temperature or the mechanic putting air in your tires? Those scammers!
Never have adviser since I do not have $500K+ investable amount to get his or her attention. :eek:

As far as comparing changing a light bulb is concern, I am talking about fee/compensation, not financial advice. Again one can pay a lump sum say $2K for few hours to get comprehensive financial advice and after that the client execute the strategies. The client could arrange another time, maybe an hour a year from now to get an update just in case.

Not necessarily good idea for advisor since "fee-only" symbolize commodization of service, while "fee-based" symbolize annuities.

DIY might very well result in lower fees if you do it right but an advisor might be able to help you save taxes; plan your estate; manage debt vs. investments; prioritize financial needs; advise on which kinds of accounts to use; make dispassionate decisions about when to buy and sell; etc.. You might pay more in fees with an advisor but many clients will net out further ahead if they benefit in the ancillary ways an advisor can help.
Again all of these issues could be dealt with by "fee-only" option, like going to Accountants or Lawyers or Doctors but how many advisors would take clients with less than $250K investable amount of cash available in the first place? It's simply not worth the cost.

Plus, no offense but many Canadians are pretty strectched dollar wise and though it makes sense to pay that much for financial advice seperately, they simply balk and revert to the old ways, i.e. fees for any financial advice, if at all embedded to management fees on the actively managed investments while these fees slowly but surely eat away the performance in the long run.

Many people aren't interested in financial matters or don't have the consistent time to do it themselves. Many are too emotional to be logical about their finances.
No doubt about it but the professionals are no better, even with the best info and technologies at disposal. The institutions, including those big pension funds, endowment funds and soverign funds made similar mistakes, say buying illiquid or faulty investments such as CDO, ABCP, MBS.

Most people could cut their own hair or change the oil on their car but is it a good use of their time or are they better off in seeking out someone to do it for them?
Unlike car maintenance, personal finance is not that complicated. It's just happen to be tedicious and many people are financially illiterate and not incline to get the financial house in order.

One does not need to learn how to spend like crazy. Personal finance on the other hand requires people to have both discipline to control spending and motivation to save and invest for the future.

Hinz raises many good points but he is coming from one angle. While many investors might very well do better by themselves there are indisputably many others who would do worse following his lead and trying to do it themselves. They'll be the ones with horrible haircuts and oil-stained hands...
True but that's not a substitute to be taken advantage of.
 
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duang

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Sure not all the advisors, be PFP/CFP/RFP/CFA/CLU are biased but the way the industry runs is full of huge conflict of interests.
Any time you have a service provider diagnosing and then solving a problem you have a possible conflict of interest. If you are that suspicious you have to separate roles and run checks on each stage. Do you take your car to a mechanic and get a quote and then go to three others? Hopefully at some point you find it in yourself to trust that someone will give you an honest opinion and is capable of solving your problem. Otherwise you do it all yourself [and you will if you are an engineer or accountant].

That's a classic when the advisor compares his or her job to GP or Specialist. It may be true both professionals participate training workshops/seminiars at 5 stars hotels or resorts sponsored by big corporations and receive free gifts as incentives to use their products but the similarities stop here.
The point was that you can't have a blanket solution to a perceived problem. You have to look at that specific situation and devise a customized plan.



Never have adviser since I do not have $500K+ investable amount to get his or her attention. :eek:
You would only need that much in assets if you were able to drive the advisor's comp down to 0.1% annually that you might envision as ideal. I have a good sized business and I willingly take on many 5 digit accounts where the person is good to deal with and has potential to grow.



Unlike car maintenance, personal finance is not that complicated. It's just happen to be tedicious and many people are financially illiterate and not incline to get the financial house in order.

One does not need to learn how to spend like crazy. Personal finance on the other hand requires people to have both discipline to control spending and motivation to save and invest for the future.
I find it hard to believe that many people would subscribe to your contention that personal finance is not that complicated. Taxes, legal issues impinging on investing decisions, managing debt, different kinds of accounts [RESP's, RDSP's, TFSA's, spousal plans, LIRA's, in-trust accounts, leveraged accounts, etc.]... yeah, not very complicated at all. Especially when they are all constantly changing and you have to fit them in with each individual's unique circumstances and risk tolerances [which are changing all the time too]. Thirty minutes a week should keep you up to speed on all that.



True but that's not a substitute to be taken advantage of.
There are many pricing models out there and some of them are undoubtedly overly generous to the advisor. It's like seeing someone pay the full rack rate at a hotel: it makes you flinch. Some people will pay an agent to find them a good hotel and fair rate. Other DIY'rs will spend an hour on the web to ferret out the best deal and feel it's a great use of their time for the $20 they saved.


The bottom line is that you might very well be paying a premium to use an advisor compared to what you can do yourself. You the consumer then needs to determine if that premium will be offset by what the advisor can do for you. I am quite confident that the ~2% annual premium that my clients pay over doing it efficiently for themselves will be a net gain to my clients over the long run. If they don't feel that way they are welcome to seek out a better setup for themselves.

I don't have a problem with you being unable to trust someone to give you good advice or good value for your money and thus insisting on doing it all yourself. Best wishes for you but you shouldn't assume that what you can do is best for everyone else too.

I'm happy to agree to disagree but we should recognize that some people are better off in your camp and some in my camp. As long as they have good information then they should be able to make the right decision for themselves.

D.
 
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hinz

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Any time you have a service provider diagnosing and then solving a problem you have a possible conflict of interest. If you are that suspicious you have to separate roles and run checks on each stage.
Nothing wrong with a possible conflict of interest as long as you equip yourself with adequate knowledge, ask simple yet relevant questions and run checks on possible pitfalls for each stage before deciding whether it's worthwhile to pay for the service.

Do you take your car to a mechanic and get a quote and then go to three others? Hopefully at some point you find it in yourself to trust that someone will give you an honest opinion and is capable of solving your problem. Otherwise you do it all yourself
Why not? You could get multiple quotes by calling to mechanics and check on line, or word of mouth from your trusted friends and relatives. An ethical and trustworthy professional will explain in plain English/layman terms the way to solve a problem and the cost to do it. Some even show you the diagnosis that you may have oversight.

That's not necessarily the case in financial industry since the advisor get compensated based on the financial products sold before suitability. Moreover many advisors are evasive to explain why selected particular in-house products, not 3rd party less expensive products one suggested.

And yes, you can do it all yourself but you need to know your own limitation, get yourself equipped with adequate knowledge before asking professional advice. Nobody protects you from being taken advantage for your ignorance.

The point was that you can't have a blanket solution to a perceived problem. You have to look at that specific situation and devise a customized plan.
That's not the point. My point is financial advisors and doctors are different when it comes to the way they get compensated, not diagnosing and devising a customized plan.

Plus, diagnosing and devising financial plans are walks in the park compared to diagnosing, prescribing medicine and refering to specialists when necessary by your family doctor/general practitioners.

Moreover, one needs to pass rigorous training and practice for a decade to be a GP, few years more for specialists. Not very confident to say this to be CFP or CFA when it comes to rigor in training and that 's based on the comment by William Bernstein, a well known financial theorist who is also a neruologist by trade.

You would only need that much in assets if you were able to drive the advisor's comp down to 0.1% annually that you might envision as ideal.
Good luck with that to get the advisor's comp down to 0.1% per annum. You may be able to negotiate that % when you have 8 figures of investable cash on hand and that's after you pay tiered fee, say 1.5% for the first $500K, 1% for the next $1 million, 0.5% starting $5 million and finally negotiable for anything $10 million or above.

I have a good sized business and I willingly take on many 5 digit accounts where the person is good to deal with and has potential to grow.
The key is potential to grow and usually the advisor will take on mostly medicial professionals who are still paying their heavy student loans and as long as they have their investments not managed by MD funds.


I find it hard to believe that many people would subscribe to your contention that personal finance is not that complicated. Taxes, legal issues impinging on investing decisions, managing debt, different kinds of accounts [RESP's, RDSP's, TFSA's, spousal plans, LIRA's, in-trust accounts, leveraged accounts, etc.]... yeah, not very complicated at all. Especially when they are all constantly changing and you have to fit them in with each individual's unique circumstances and risk tolerances [which are changing all the time too]. Thirty minutes a week should keep you up to speed on all that.
Personal finance is complicated only for those who are fortunate to accumulate good money and I would not be surprised people who are in such situation is less than 10% of the population.

That's the goldmine for financial industries, not your average Joes and Janes who live paycheque to paycheque and try hard to squeeze after tax dollars to pay down credit card debts and mortgages before seriously considering investing for retirement. The rest of the population needs to set the priority by paying down the debts and increasing the cash flows first, not handing hard earn money to somebody to manage.

There are many pricing models out there and some of them are undoubtedly overly generous to the advisor. It's like seeing someone pay the full rack rate at a hotel: it makes you flinch. Some people will pay an agent to find them a good hotel and fair rate. Other DIY'rs will spend an hour on the web to ferret out the best deal and feel it's a great use of their time for the $20 they saved.
Nothing wrong for those who are spending money lavishly, except a few of them could afford it since they are top 5% of the population and they spend below their means, while the remaining majority are income statement affluent, meaning aspiring individuals who want to look like rich but few financial wealth to prove it.

On the other hand, most of the balance sheet affluent are DIY'rs.

The bottom line is that you might very well be paying a premium to use an advisor compared to what you can do yourself. You the consumer then needs to determine if that premium will be offset by what the advisor can do for you. I am quite confident that the ~2% annual premium that my clients pay over doing it efficiently for themselves will be a net gain to my clients over the long run. If they don't feel that way they are welcome to seek out a better setup for themselves.
Sounds like your books are well established, maybe planning for newly trained advisors to buy out your business before retirement.

Not necessarily so for the upstart aspiring advisors who need any clients to build up the working experiences, meaning getting the relevant designations. There's a saying when it comes to clients relatively low investable asset-it may be trash/junk for seasonal advisors catering high net worth, but gold nuggets for new birds :rolleyes:

I don't have a problem with you being unable to trust someone to give you good advice or good value for your money and thus insisting on doing it all yourself. Best wishes for you but you shouldn't assume that what you can do is best for everyone else too.
The best for everyone else should be reform the compensation scheme by scrapping commission, fee-based, kickback/rebate/trailer fees system. Without going to fee-only system, CFP and CFA will never get the same respect similar to Doctors, Lawyers, Accountants and Engineers.

I'm happy to agree to disagree but we should recognize that some people are better off in your camp and some in my camp. As long as they have good information then they should be able to make the right decision for themselves.
No argument here.
 
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Nickelodeon

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Interesting debate.

I'm in Hinz' camp. I cannot take advice of any kind when the advisor is in the pay of the seller and I'm the buyer.

Can you imaging taking legal advice from your opponent's lawyer because it's "free"? Same as real estate agent's.
 

duang

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Interesting debate.

I'm in Hinz' camp. I cannot take advice of any kind when the advisor is in the pay of the seller and I'm the buyer.

Can you imaging taking legal advice from your opponent's lawyer because it's "free"? Same as real estate agent's.
The advisor is paid by the client from the fees that come off his gross returns. The advisor is often paid the same whichever investments he picks so he is motivated to do the best for the client since that is where new clients come from [i.e. referral]. As well, a good part of the advisor's income is based on the trailer fee over time and thus growing the clients assets directly increases the advisor's income so the advisor is compensated for picking the best investments.

Many of the products pay the same commission so once the client decides to use an advisor the advisor is paid the same whether he gives his best advice or not.

And, as unbelievable as it sounds, some advisors actually want their clients to do well and aren't obsessed with chiselling them for every possible dollar as soon as possible! I tell prospective clients exactly how much I get paid [and thus what they are ultimately paying] on every dollar they invest and also how I expect to give them value for what they are paying. If they see this as good value then they use me.

Unfortunately, there are bad apples out there but if you are unable to make that leap of faith that someone will give you good advice, then good luck and by all means go ahead and figure it out yourself. That's always your right. Many of you will even do just as well or better but many wouldn't be able to or have no interest in micromanaging their financial affairs like that.

As long as people have choice and access to good info in deciding then there shouldn't be a problem; vive la difference. Just because someone has different priorities and doesn't mind paying more to have someone do it doesn'tt make it wrong even though you don't want to do it that way yourself.

D.
 
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duang

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That's not necessarily the case in financial industry since the advisor get compensated based on the financial products sold before suitability. Moreover many advisors are evasive to explain why selected particular in-house products, not 3rd party less expensive products one suggested.
Suitability has to be established before an investment can be made. There are always going to be people in all walks of life who will try to make more money from you by selling you something more expensive. You need to determine if it's a fair price.

One of the biggest differences between our positions is that you seem to expect everyone in finance to try to screw you while I try to find people I trust to solve my issues and I tend to trust them to do right by me unless they give me reason to lose that trust.


The key is potential to grow and usually the advisor will take on mostly medicial professionals who are still paying their heavy student loans and as long as they have their investments not managed by MD funds.
This has nothing to do with any advisors I know. I think there is an undertone of some sort of class warfare in your terminology: e.g. "your average Joes and Janes who live paycheque to paycheque". A resentment of some mythical obscenely rich broker [like Donald Duck's rich uncle] living off screwing the hard working ordinary man by churning his account and ripping him off blindly with scandolous fees.

On the other hand, most of the balance sheet affluent are DIY'rs.
People with really big money hire professionals to manage it. They didn't get rich by being control freaks and micromanaging everything. They understand that for complicated issues you hire trusted professionals who add value after they are paid.

The best for everyone else should be reform the compensation scheme by scrapping commission, fee-based, kickback/rebate/trailer fees system.
This argument always makes me chuckle: if you follow it through to its logical conclusion, then only people with scads of money would be of interest to an advisor. Anyone with moderate or low wealth would not be viable clients under this scenario. How is that a good solutiion for those people not capable of managing their own financial affairs properly?


Without going to fee-only system, CFP and CFA will never get the same respect similar to Doctors, Lawyers, Accountants and Engineers.
I would never ever want the same respect that lawyers deserve [I think this is either a subtle shot or else just reflects your regard for financial advisors if lawyers are above them]. I would think that many medical professionals are not oblivious to the financial rewards of their profession so I would not consider them as nobly as you seem to do. I am not being insulting towards Accountants or Engineers [since I suspect you are one of them] but they are very linear thinking in many cases and I do not aspire to whatever respect you feel they deserve.



Instead of being resentful of advisors and painting them as always inclined to ripping off clients, why don't you just advocate an open system of fee disclosure and leave choice to individuals?

D.
 

emvee

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Having worked at a major broker/dealer, I saw many times where head office was the major driver of what you might call back advisor experience.

They'd do stuff like charge inactivity fees on accounts that didn't trade enough, then put the advisor in a position to encourage their client to trade even if it was in their client's best interest.

Some advisors would eat the charge. Others would pass the decision onto their clients - trade or pay a fee.

If you are going DIY, you better know what the hell you are doing or you may get killed in these markets.
 

hinz

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Suitability has to be established before an investment can be made. There are always going to be people in all walks of life who will try to make more money from you by selling you something more expensive. You need to determine if it's a fair price.
No problem with that but the suitability is overrated as Jim Rogers used to say, suitability is just like Diversification-to cover the brokers/advisors butt from being sued by the clients, rogue ones no less.

One of the biggest differences between our positions is that you seem to expect everyone in finance to try to screw you while I try to find people I trust to solve my issues and I tend to trust them to do right by me unless they give me reason to lose that trust.
I am not going to use the word screw but it's pretty close. They would squeeze/nickle and dime your wealth annually hard but not too hard to backfire, aka killing the golden goose. Pretty much the same time as charging high interest on credit card but not too high to discourage people or make them snapped.

This has nothing to do with any advisors I know. I think there is an undertone of some sort of class warfare in your terminology: e.g. "your average Joes and Janes who live paycheque to paycheque". A resentment of some mythical obscenely rich broker [like Donald Duck's rich uncle] living off screwing the hard working ordinary man by churning his account and ripping him off blindly with scandolous fees.
I ain't a fan of class warfare and I am not working in the government/union fan and their communists clique.

As far as screwing the hard working oridinary men by churning and ripping off them with fees are concerns, the fact speaks to itself as MER in Canada is acknowledged the most expensive in the world.

No matter since the industry uses different approach other than money incentive/lobbying to discredit the fact, ranging from obscure academics doing the survey to just trying to get attention for funding, to the media exposing the fees trying to increase circulation/ratings, to the Attorney General trying to rein in as a way to seek publicity and route to the premier office and last but not the least abused investors who are bunch of CSB GIC crybabies/refugees and never put themselves in these "sophisticiated games".

BTW, Scoorge McDuck/Ebenezer Scoorge is a role model for some billionaires say Andrew Carnegie and Warren Buffett.

People with really big money hire professionals to manage it. They didn't get rich by being control freaks and micromanaging everything. They understand that for complicated issues you hire trusted professionals who add value after they are paid.
Maybe but the fees they paid are minimum compared to their 8 to 9 figures. The fees are all within their means.

By comparison, the % charged on their asset levied on 6 to 7 figures of assets annually is high in proportion to the value added services, if ever most of the time received.

As far as being micromanaging and complicated issues are concern, they should not have to do so unless he is getting greedy and gets persuaded by good looking, well-dressed hedge funds guys asking for big money to have absolute returns. Couch Potatoes portfolio and annual rebalancing are all they need. The portfolio may not beat a minority of actively managed funds but definitely beat the majority of also ran actively managed funds for sure.

And yes, those really big money pay the trusted Attorney and CFP/CFA who are fee only to handle those complicated issues and the big money are not hesitant to spend big on comprehensive planning, not so-called value added services with % of your wealth as compensation.


This argument always makes me chuckle: if you follow it through to its logical conclusion, then only people with scads of money would be of interest to an advisor. Anyone with moderate or low wealth would not be viable clients under this scenario. How is that a good solutiion for those people not capable of managing their own financial affairs properly?
Yes, only people with scads of money would be of interest to an advisor as they probably have enough money to live life comfortably. It's their risk to get absolute return and leverage their way to do it.

Moderate or low wealth clients do not need ones as they need to get their priority straight, meaning paying down your debts including mortgages, rein-in your spending and increasing emergency funds before ever thinking of investing a dollar in the stock market, except he or she gets a match from the employer on the DC plan. Once they have solid footings and not over their heads, they could start to build their wealth by couch potatoes portfolio.

Financial affairs are not that complicated for most people unless someone is really successful in his or her business SME and only then it warrants expertises from the professionals. For the majority of working people, it's complicated when they want to and/or somebody who try to convince them in order to secure value-added services.

BTW, financial affairs for most folks are simple to tackle but not easy to implement consistently.

I would never ever want the same respect that lawyers deserve [I think this is either a subtle shot or else just reflects your regard for financial advisors if lawyers are above them].
No argument here....

I would think that many medical professionals are not oblivious to the financial rewards of their profession so I would not consider them as nobly as you seem to do.
They are definitely noble when these cream of the crop are competiting to be admitted to the medical schools nationwide but they are very oblivious to the financial rewards of their profession after saddling themselves with 6 figures of student loans.

Wonder why there are more specialists on practice than the GP, even though governments repeatedly say GP shortages are critical, while there're surplus by comparison for the specialists? Cause the specialists earn significantly more bucks than the generalists and hence faster to pay back the student loans.

I am not being insulting towards Accountants or Engineers [since I suspect you are one of them] but they are very linear thinking in many cases and I do not aspire to whatever respect you feel they deserve.
I am not an engineer but I have no qualms on accountants. Personally I prefer auditors working for the federal governments ;)

Instead of being resentful of advisors and painting them as always inclined to ripping off clients, why don't you just advocate an open system of fee disclosure and leave choice to individuals?
No point to do so since most of the advocates are lefties, something I personally have big reservations since they have total disregard on budgeting (same as the right wing no less but on different issues).

Moreover, most of the politicians are under influences by the lobbyists from the financial industries and many of them are big clients to the top 1% advisors. That's in addition to receiving generous compensation and indexed pensions courtesy to the taxpayers. Why would they rock the boat? Many career politicians could not grasp the daily struggle of the middle class families, let alone the poor ones.

Unless the financial industries are getting too greedy and their politicians warn they could not provide cover for the industries as their constituents could gang up and vote him or her out next election, something in many case turned out to be bluffing since the popoluation are apathetic when it comes to election.
 
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