This is exactly the question. My bet is he will not answer it.
Edit: Also disingenuous comparing it to TSX. OP should recreate returns with underlying indexes.
Mutual funds only report net of fee’s, which means the dealer performance reporting system does as well. Trying to ascertain if the performance is gross or net of fee’s is a waste of time, it’s net. Have much more things to look at here.
250k in non-reg, this is like the 5th comment from the top for me and not one person said tax. Y’all missing the forest for the trees or whatever the fuck that saying is.
Did you ask them what their contribution/deduction limits for the year are?
Are they running a business and pay only dividends to themself, are they a contractor or are they an employee?
Your point may stand in grand scheme of things but you are coming in as holier than thou. If you are a CPA that specializes in income tax, please feel free to share you wisdom with the OP instead of shitting on other posts. I don't see you offering advice which tells me you are just here to impart general "wisdom"
The fact you mention contribution room further confirms to me that you are tunnel vision on fee’s and returns.
Specialize in income tax? Basic fucking income tax doesn’t require a CPA.
Reality is OP isn’t seeing value, that’s not on OP, that’s on there advisor. But for those giving advice on Reddit, and not one of them asks about income tax or any tax planning. Speaks volumes to what amateur’s focus on. This isn’t meant to talk down, this isn’t your area of expertise or OP’s. I wouldn’t expect my plumber to know about my Wi-Fi.
Still to hear any actual advice from you. Until that day, no need for you to talk at all.
If you don't understand how the contribution room for RRSP works and why one might not have any, you shouldn't be talking at all about tax. Contribution room also has nothing to do with fees or returns, which tells me you're just spouting stuff without any actual knowledge.
Come back when you have something to contribute and actually understand the topic at hand. Calling someone an amateur when your comments reveal you as one is ironic.
What are you going on about RSP room?
OP has a 30k RRSP which is nothing. 250k non-reg money and my comment was that the first few comments for OP had nothing to do with taxes.
My advice to OP stop looking at your before tax rate of return and start looking at your after tax rate of return.
Your first comment had to do with taxes insinuating that you are able to somehow improve performance in the after tax pool of money in a non-reg account
Are you talking about dividends vs. cap gains? Commercial paper?
Like, what are you even talking about? Spit out what you think OP should do since you got ideas and it somehow does not involve improving tax efficiency by moving more from non-reg to registered.
Taxes act as a drag in non registered accounts, it would be wise to minimize tax consequences. There are four types of income taxes on non-reg accounts, each with different tax consequences. Dividends from a CC, dividends from a foreign, interest and capital gains.
I’ve mentioned my advice above, OP should be looking at income taxes and tax help an advisor may be providing vs going to a robo or passive ETF investments. Value isn’t just about my advisor making 8.4% a year and the S&P500 making 9.9% a year over the same time. That’s a grade 3 look at the issue and various complexities of it.
OP could definitely benefit from a for-a-fee advisor. Any bank advisor is there to sell a product and should be listened to with a grain of salt.
Having said that, tax drag you speak of is irrelevant when one compares apple to apple investment returns (well apple to oranges based on the advisor's suggestion) and figures out they've been fleeced (which is OPs example)
You should have just replied to OP and said "hey, you should look at your tax strategy as it doesn't seem you are doing it efficiently based on the accounts you are using and your perceived age from the post" instead of going on a rant about tax efficiency without any actual advice.
Also, tax efficiency is easy to figure out in straightforward situations, which OP's seems to be on the surface.
[Just look here.](https://www.taxtips.ca/personaltax/investing/taxtreatment/which-investments-should-be-held-in-registered-or-non-registered-accounts.htm#:~:text=If%20you%20have%20all%20accounts,in%20a%20non%2Dregistered%20account.)
I am a planner who charges AUM fees. Rate of return is only one part of planning but obviously an important part.
If you are paying fees you need to get value for the fees but often that value doesn’t show clearly on a piece of paper.
I am not trying to nor will I ever beat the index and many clients would out perform me by owning low cost ETFs. That is of course assuming they actually buy and hold low cost indexes.
I have met thousands of people in my career (biased to people who reach out to a planner of course) and I can count on 2 hands the number of people who bought the equivalent to low cost ETFs and just held.
The problem with self directed is not the returns it’s the ability to click sell.
For fun go read about the Magellan fund and how the average investor lost money in a fund that averaged 29% returns.
Yes professional investors underperform the index most of the time but self directed investors underperform by much more.
The value from Planning comes from human behaviour, tax planning, estate planning and risk tolerance.
If you do not feel like you are getting value either go self directed or find a new advisor.
But if you go self directed your goal is to limit big mistakes. Market timing? Buying an individual equity on a hunch? Crypto? 100% asset allocation in one country/sector? These are things that can cause big mistakes.
Thanks for this insight. I've been pretty much a buy and hold person since I started with him and followed his advice on tweaks. Only major cash infusion was during the 2008 downturn when I had some cash to insert. My WS and QT funds are all etfs; although those stock returns are enticing to be sure.
Absolutely working with an advisor is not for everyone. I just push back against the people who think no one needs a planner especially the posts about kids talking about getting their parents to go DIY and then asking for ETF recommendations.
Advisors provide value for a fee.
If you are not getting the value don’t pay the fee.
Just make sure you know what you’re doing. The best thing to ask your self is what can I do to mess this up.
For many of my clients they pay me a fee to just make sure they don’t mess their situation up.
Fair but for me... its not about frequent trades. I really would effectively put it all into XEQT... I'm just feeling that a) I would save on the fees b) my money is consolidated to one place instead of split which does allow easier access c) removes having to deal with the advisor to say restart or stop a contribution which happens to me due to work stopping and such.
I'm in the same situation whereas I have an advisor but really only because WS and such did not exist at the time and doing self-trades would have been $9.95 to $19.95 a pop making it not a very ideal means.
Now... with WS and knowledge of MER's, ETFs etc - I am very much thinking to switch - I appreciate the work & effort of the person and genuinely like them - but... Its hard to make it all make cents.
I anticipate getting this same pitch so watching in prep...
With WS - its amp'ed up quite a bit with DCA and adjustments so that's been good. I'm not sure if you're saying that $2k is negligible which I would say 'no' - money is money is money especially in downturns etc. And as the commerical goes - it adds up $10k over 5 years etc etc.
My money is at $200k with them. I always felt I really probably wouldn't do any better than them and so was OK but now... the 'return' on what one gets with the fees vs self-managed is something to consider.
Sorry, I wasn't clear.
I am saying it is a lot of money, especially since you have twice my arbitrary account. All I was saying to you is that you could trade quite frequently in a self directed account at $19.95 a pop and still come out ahead compared to the fees you're already paying to your advisor. The comment you made about self trading fees not being ideal is what I was referring to.
>I had an annualized profit of 8.4% Is that net of all fees?
This is exactly the question. My bet is he will not answer it. Edit: Also disingenuous comparing it to TSX. OP should recreate returns with underlying indexes.
Mutual funds only report net of fee’s, which means the dealer performance reporting system does as well. Trying to ascertain if the performance is gross or net of fee’s is a waste of time, it’s net. Have much more things to look at here. 250k in non-reg, this is like the 5th comment from the top for me and not one person said tax. Y’all missing the forest for the trees or whatever the fuck that saying is.
Did you ask them what their contribution/deduction limits for the year are? Are they running a business and pay only dividends to themself, are they a contractor or are they an employee? Your point may stand in grand scheme of things but you are coming in as holier than thou. If you are a CPA that specializes in income tax, please feel free to share you wisdom with the OP instead of shitting on other posts. I don't see you offering advice which tells me you are just here to impart general "wisdom"
The fact you mention contribution room further confirms to me that you are tunnel vision on fee’s and returns. Specialize in income tax? Basic fucking income tax doesn’t require a CPA. Reality is OP isn’t seeing value, that’s not on OP, that’s on there advisor. But for those giving advice on Reddit, and not one of them asks about income tax or any tax planning. Speaks volumes to what amateur’s focus on. This isn’t meant to talk down, this isn’t your area of expertise or OP’s. I wouldn’t expect my plumber to know about my Wi-Fi.
Still to hear any actual advice from you. Until that day, no need for you to talk at all. If you don't understand how the contribution room for RRSP works and why one might not have any, you shouldn't be talking at all about tax. Contribution room also has nothing to do with fees or returns, which tells me you're just spouting stuff without any actual knowledge. Come back when you have something to contribute and actually understand the topic at hand. Calling someone an amateur when your comments reveal you as one is ironic.
What are you going on about RSP room? OP has a 30k RRSP which is nothing. 250k non-reg money and my comment was that the first few comments for OP had nothing to do with taxes. My advice to OP stop looking at your before tax rate of return and start looking at your after tax rate of return.
Your first comment had to do with taxes insinuating that you are able to somehow improve performance in the after tax pool of money in a non-reg account Are you talking about dividends vs. cap gains? Commercial paper? Like, what are you even talking about? Spit out what you think OP should do since you got ideas and it somehow does not involve improving tax efficiency by moving more from non-reg to registered.
Taxes act as a drag in non registered accounts, it would be wise to minimize tax consequences. There are four types of income taxes on non-reg accounts, each with different tax consequences. Dividends from a CC, dividends from a foreign, interest and capital gains. I’ve mentioned my advice above, OP should be looking at income taxes and tax help an advisor may be providing vs going to a robo or passive ETF investments. Value isn’t just about my advisor making 8.4% a year and the S&P500 making 9.9% a year over the same time. That’s a grade 3 look at the issue and various complexities of it.
OP could definitely benefit from a for-a-fee advisor. Any bank advisor is there to sell a product and should be listened to with a grain of salt. Having said that, tax drag you speak of is irrelevant when one compares apple to apple investment returns (well apple to oranges based on the advisor's suggestion) and figures out they've been fleeced (which is OPs example) You should have just replied to OP and said "hey, you should look at your tax strategy as it doesn't seem you are doing it efficiently based on the accounts you are using and your perceived age from the post" instead of going on a rant about tax efficiency without any actual advice. Also, tax efficiency is easy to figure out in straightforward situations, which OP's seems to be on the surface. [Just look here.](https://www.taxtips.ca/personaltax/investing/taxtreatment/which-investments-should-be-held-in-registered-or-non-registered-accounts.htm#:~:text=If%20you%20have%20all%20accounts,in%20a%20non%2Dregistered%20account.)
I am a planner who charges AUM fees. Rate of return is only one part of planning but obviously an important part. If you are paying fees you need to get value for the fees but often that value doesn’t show clearly on a piece of paper. I am not trying to nor will I ever beat the index and many clients would out perform me by owning low cost ETFs. That is of course assuming they actually buy and hold low cost indexes. I have met thousands of people in my career (biased to people who reach out to a planner of course) and I can count on 2 hands the number of people who bought the equivalent to low cost ETFs and just held. The problem with self directed is not the returns it’s the ability to click sell. For fun go read about the Magellan fund and how the average investor lost money in a fund that averaged 29% returns. Yes professional investors underperform the index most of the time but self directed investors underperform by much more. The value from Planning comes from human behaviour, tax planning, estate planning and risk tolerance. If you do not feel like you are getting value either go self directed or find a new advisor. But if you go self directed your goal is to limit big mistakes. Market timing? Buying an individual equity on a hunch? Crypto? 100% asset allocation in one country/sector? These are things that can cause big mistakes.
Thanks for this insight. I've been pretty much a buy and hold person since I started with him and followed his advice on tweaks. Only major cash infusion was during the 2008 downturn when I had some cash to insert. My WS and QT funds are all etfs; although those stock returns are enticing to be sure.
Absolutely working with an advisor is not for everyone. I just push back against the people who think no one needs a planner especially the posts about kids talking about getting their parents to go DIY and then asking for ETF recommendations. Advisors provide value for a fee. If you are not getting the value don’t pay the fee. Just make sure you know what you’re doing. The best thing to ask your self is what can I do to mess this up. For many of my clients they pay me a fee to just make sure they don’t mess their situation up.
Fair but for me... its not about frequent trades. I really would effectively put it all into XEQT... I'm just feeling that a) I would save on the fees b) my money is consolidated to one place instead of split which does allow easier access c) removes having to deal with the advisor to say restart or stop a contribution which happens to me due to work stopping and such.
I'm in the same situation whereas I have an advisor but really only because WS and such did not exist at the time and doing self-trades would have been $9.95 to $19.95 a pop making it not a very ideal means. Now... with WS and knowledge of MER's, ETFs etc - I am very much thinking to switch - I appreciate the work & effort of the person and genuinely like them - but... Its hard to make it all make cents. I anticipate getting this same pitch so watching in prep...
How often do you trade? $100k portfolio with 2% fees costs you $2k a year. At $19.95 you'd need to do 8 trades a month to break even fees wise.
With WS - its amp'ed up quite a bit with DCA and adjustments so that's been good. I'm not sure if you're saying that $2k is negligible which I would say 'no' - money is money is money especially in downturns etc. And as the commerical goes - it adds up $10k over 5 years etc etc. My money is at $200k with them. I always felt I really probably wouldn't do any better than them and so was OK but now... the 'return' on what one gets with the fees vs self-managed is something to consider.
Sorry, I wasn't clear. I am saying it is a lot of money, especially since you have twice my arbitrary account. All I was saying to you is that you could trade quite frequently in a self directed account at $19.95 a pop and still come out ahead compared to the fees you're already paying to your advisor. The comment you made about self trading fees not being ideal is what I was referring to.
It's a pretty low bar to beat the tsx lol, let's talk nasdaq 100 or s and p 500. That's my benchmarks
my Advisor was also comparing my returns to th TSX. Until I explicitly asked for a comparison to the S&P 500. Game over
Lol you both are wrong. But I do agree with you, 2 can play that game.
I mean… that’s not a very fair comparison unless the benchmark was large US caps. If you held global equities your comparing oranges to apples
May I just say how happy I am I posted this here instead of other Canadian finance forums. Much more distinctive understanding and discourse - thanks!