I went to an investment advisor firm party for rich people

[Mandala]

You need a million before they accept you as a client

As I walked in there was a big sign that said 'Welcome Mandala' then as I turned to walk out of such a display
meant to influence my decision I was collared and lead back in so I stayed and this is my report

There are roughly two ways they invest

Buying individual stocks
or
invest money in index funds or mutual funds and they charge 1% and everything, like taxes and MER of funds, you pay for

After their sales potch, I talked to the clients as I ate the firms food, which was pretty good as they have a full kitchen
with a chief for such events. The clients I talked to did not know how their money was invested and
what their return is or what the risk was yet they all said the firm was excellent. WTF????????????

Some rich people do not deserve to be rich


You can buy the index funds for a few basis points or pay them over 10K minimum . I refuse to buy mutual funds
with their absurd MER of 2.5% and I refuse to let any firm invest my money into individual stocks as any evidence
the firm pulls out to confirm their stock picking wisdom can be so easily twisted it would have no value other than
issuing a huge red flag if they promise huge returns because they use hedging
IE extremely risky nonsense like currency betting going short etc. that I can
now participate in because I am one of the elite

 

[Zoot Allures]

My thoughts are such a firm has value because they offer discipline.

They encourage regular deposits and are there to offer the discipline of
control instead of panic selling when prices drop then buying back in
when stocks rise IE selling low and buying high.

$10,000 for this service is worth it when you got a million

You could use a financial planer who gives you advise but you administer the plan





In this video Ben Felix gives you free financial planning

 

[jeff2]

You need a million before they accept you as a client

As I walked in there was a big sign that said 'Welcome Mandala' then as I turned to walk out of such a display
meant to influence my decision I was collared and lead back in so I stayed and this is my report

There are roughly two ways they invest

Buying individual stocks
or
invest money in index funds or mutual funds and they charge 1% and everything, like taxes and MER of funds, you pay for

After, I talked to the clients as I ate the firms food, which was pretty good as they have a full kitchen
with a chief for such events. The clients I talked to did not know how their money was invested and
what their return is or what the risk was yet they all said the firm was excellent. WTF????????????

Some rich people do not deserve to be rich


You can buy the index funds for a few basis points or pay them over 10K minimum . I refuse to buy mutual funds
with their absurd MER of 2.5% and I refuse to let any firm invest my money into individual stocks as any evidence
the firm pulls out to confirm their stock picking wisdom can be so easily twisted it would have no value other than
issuing a huge red flag if they promise huge returns because they use hedging
IE extremely risky nonsense like currency betting going short etc. that I can
now participate in because I am one of the elite

You can get mutual funds and pay a MER of around 1.00% now as discount brokers are no longer allowed to be paid trailer fees by the fund companies.
Or just buy etfs like VBAL. If the investment advisor is helping with things such as estate planning, taxes, adjusted cost bases, etc there could be some value to that.

 

[jeff2]

Yes, a lot of discount brokerages got fined, for charging trailer fees to clients who held mutual funds in a discount brokerage account . Reason being, discount brokerages aren't allowed to give financial advice. Yet the discount brokerages were collecting mutual fund trailer fees, anyway!!

Yeah. Regulators really dragged their feet on this. I bought a Fidelity fund in the 1990s and was always annoyed by this.

 

[Mandala]

You can get mutual funds and pay a MER of around 1.00% now as discount brokers are no longer allowed to be paid trailer fees by the fund companies.
Or just buy etfs like VBAL. If the investment advisor is helping with things such as estate planning, taxes, adjusted cost bases, etc there could be some value to that.

I said they charge extra for services like taxes, estate planning etc

Minimum charge is 1% plus MER for their cheapest product which is index funds which is the only one I am interested
in as I have no way of verifying their stock picking history plus I lose control as they buy and sell every day and my stategy is know WTF you are investing in, have control and do not get greedy

Thx for the info on mutual funds and brokers but what is a discount broker as apposed to a full service broker?

You can buy some mutual funds direct and lose the broker fees altogether so I suspect the minimum mutual funds MER is around 1-1.5 % while index funds can be as low as .1% basically free

Mutual funds are now forced to compete with index funds

 

[Mandala]

Yes, a lot of discount brokerages got fined, for charging trailer fees to clients who held mutual funds in a discount brokerage account . Reason being, discount brokerages aren't allowed to give financial advice. Yet the discount brokerages were collecting mutual fund trailer fees, anyway!!

Yes they sneakily got trailer fees from funds they bought for clients and the more of that fund they sold the higher the percentage

 

[jeff2]

Another option.

Best robo-advisors in Canada for 2025 - MoneySense

Find out which Canadian robo-advisors offer the lowest fees, best support, top returns, and more, with MoneySense’s 2025 guide.

www.moneysense.ca

 

[Ceiling Cat]

Investment advice firms operate with a primary goal of maintaining client trust while ensuring steady, predictable returns. As someone with family in the financial sector, I can tell you that any firm or advisor promising a consistent 16% return simply won’t deliver because they won’t take that risk. If they got you 16% one year and failed to match it the next, you’d call them incompetent and move your money elsewhere. Instead, they focus on safe, steady returns, typically around 4-5% annually. If they help you achieve a rare 6-7% return in a good year, they’ll emphasize how exceptional it was. Conversely, when returns dip to 2-3%, they’ll assure you that the entire market is down and that your portfolio was positioned wisely to protect your assets. Given this cautious approach, you might find that simply investing in an ETF or mutual fund where fees are lower and market trends dictate performance could be a better long-term strategy.

 

[Mandala]

Investment advice firms operate with a primary goal of maintaining client trust while ensuring steady, predictable returns. As someone with family in the financial sector, I can tell you that any firm or advisor promising a consistent 16% return simply won’t deliver because they won’t take that risk.

After watching post 2 vid and some more Ben Felix , I realize 16% average cannot be done. No way

If they promise that I walk as they are taking way to much risk and when they lose they will lose big time

Instead, they focus on safe, steady returns, typically around 4-5% annually. If they help you achieve a rare 6-7% return in a good year, they’ll emphasize how exceptional it was. Conversely, when returns dip to 2-3%, they’ll assure you that the entire market is down and that your portfolio was positioned wisely to protect your assets.

Sounds closer to reality

Of course it depends on the market but on average 4% is not enough

Given this cautious approach, you might find that simply investing in an ETF or mutual fund where fees are lower and market trends dictate performance could be a better long-term strategy.

Agree but advisors do offer discipline but I am thinking of doing it myself and save 1% but 1% is not that much

 

[jeff2]

IMHO, a lot of these investment firms are a scam. They prey on rich people who choose to learn nothing about investing. I have a few wealthy friends who don't even know what an ETF is. They tell me, why do I need to know what an ETF is, "I'll just let my financial advisor handle everything.'!!

What is amazing is that many people think there are no fees. Then there are people who say "I am going to buy an RRSP".

 

[Mandala]

These firms are also good for HNW (high net worth) investors, who choose to know nothing about investing.

The thing is it is not hard to DIY. If the advisor simple puts it into index funds WTF can I not do it myself? What is the big deal?

People think you need either a mutual fund or an advisr to take care of your money as they think it is too complex but from what I can see it is easy. Set it in an index fund and forget it

 

[jeff2]

What financial advisors do, is often criticize index funds. These HNW advisors say, "our firm has proprietary products that are guaranteed to beat the market" Why buy index funds or index ETFS, when you can beat the market investing with us----LOL" The funny thing is, a lot of HNW investors, fall for this line of reasoning!!

Yeah. They will also say that they did not beat the market but they exposed you to less risk. Also, it always seems to be "a stock picker's market". They never say now is a good time to index.

 

[Mandala]

What is amazing is that many people think there are no fees. Then there are people who say "I am going to buy an RRSP".

At 1% for a index fund advisor account it is well worth it if you are financially illiterate which some rich people are

How did they get rich?

Are you saying they think one buys an RRSP ? like they do not understand it is a tax shelter meant to encourage savings?
IMHO a registered account is there so you save and the government does not have to take care of you

Like a TFSA it is registered account you open for free then put money in, not something you buy

 

[Mandala]

It isn't hard to DIY, with index products. All you basically need to do, is open your own discount brokerage account, which scares a lot of people. However, if every investor, decided to DIY with their own discount brokerage accont, then these HNW advisory firms would all go out of business. When I'm talking about HNW investment firms, I'm talking about advisors wearing $5000 suits and rolex watches etc Also their offices are full of fancy furniture etc

As usual, just my opinion!!

Index funds have come to the rescue of investors from mutual funds and advisors

Totally changed investing for the common man

Where are the financial advisors yachts? if they can beat the market
Why do they need a few points of my money if they got the system beat?

 

[Mandala]

Yeah. They will also say that they did not beat the market but they exposed you to less risk. Also, it always seems to be "a stock picker's market". They never say now is a good time to index.

The way I see it is mutual funds, on average, cannot even match index funds after their MER is subtracted and they have
the wise guys in charge so why should a stock picker outsmart mutual funds?
Some mutual funds do beat the market but that is by chance as they have so many funds

 

[Mandala]

Excellent comment. Someone might get rich, by selling for example, a highly lucrative manufacturing business, but this business owner would know absolutely nothing about investing. Yes, some people think that you just buy an RRSP, not realizing that you have to fill the RRSP up with products such as individual stocks or ETFS etc.

Same thing with a TFSA. Some people will say, "I just bought a TFSA today."

But if you were financially smart enough to make good money in business that same financial acumin should carry over to investing

but I do have a brother who is a lawyer and he is the same way which is very surprising

 

[Mandala]

IMHO, mutual funds are an obsolete product. It's best to stick to ETFS!!

Mutual fund companies now have their own ETFs but there will always be a market for actively managed funds
as the argument that they can beat passively managed funds is compelling but Ben Felix explains empirical data proves otherwise

ETFs are called passively managed

 

[Mandala]

Yes, but a lot of advisors are against indexing, because it pays these advisors very little money. Basically to buy index ETFS like XSP and XIU, etc you have to do it on your own through a discount brokerage account!!

Indeed, you buy them like any stock through your banks discount brokerage account

XIU is TSX index and XSP is S&P index

Warren Buffet says buy S&P index then forget and hold and I trust Buffet as he has beat the market over the years

 

[Mandala]

IMHO, you have to follow the money. Most advisors, won't service any clients whose net worth is below $500 K. That's where mutual funds come in. If your net worth is somewhere between $100-$250K, and if you want financial advice, then you have to go to your local bank branch,where they'll sell you bank based mutual funds, where these bank based advisors collect the trailer fee. These bank based advisors aren't even allowed to sell ETFS, because these bank advisors are not licensed to sell ETFS, only mutual funds.

It's kind of funny. You can be an unlicensed investor (like myself), and be allowed to buy any individual stock or ETF you want, as long as you set up your own discount brokerage account. Reason being is that you're totally on your own. The discount brokerage statements say "no advice give." whereas an advisor who only has his/her license to sell clients mutual funds, can not dip into the ETF or individual stock pool of investments, to sell to their clients. The advisor needs a CSC (Canadian securities course) license in order to be allowed to sell clients individual stocks or ETFS!!

I did not know that but I did go to a TD investment guy and yes, it was all about mutual funds

He was easy to read as a guy who took a weekend sales course and now he is an expert advisor who has to sell millions worth of funds to make a living living as I assume he gets ≈ .5% unless he can sell a lot of one fund and his trailer fees go up so his advice is BS

He is thinking if he can sell enough he can sit back and the let the money roll in but he is naive because at .5% commission he needs 20 million $ and it seems like a lot of work when customers invest a few thousand

Doing the same sales speil to customers everyday all day pretending to be an expert who cares about you must get depressing

 

[richaceg]

One thing I've learn about jnvestment advisors is that they exist not to help you get rich...they exist to get rich off your money....the interest your earn is the fee they pay you...for using your money....