From my reading so far I’m looking at ETFs with WS, and that I should start with the TFSA. Am I on the right track and what do you recommend?
From my reading so far I’m looking at ETFs with WS, and that I should start with the TFSA. Am I on the right track and what do you recommend?
That is terrible advice! Don’t listen to strangers on the internet! Not even anybody you know who isn’t a professional. That’s bad! They’re not liable for anything.
If a bank advisor gives you bad advice they are liable. They’re supposed to have a financial planner license which gives them the obligation to provide you with correct advice.
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How can they be robbed of their retirement savings? What compounding effects? It all depends what these mutual funds have in them. I really don’t see how a mutual fund can purposefully rob someone of their savings. And I especially don’t see how the bank benefits from that other than the broker fees.
It is terrible advice. And it’s less terrible than advising them to go to a bank.
I’m sorry but you’re misinformed. When you walk into a bank and ask for financial advice those employees are NOT liable in Canada nor are they required to have full certifications.
They have no fiduciary duty to you and in fact they are PUNISHED for not scamming effectively or often enough for the banks. They have performance quotas to meet that are misaligned with their customers interests.
Pay for someone who is actually qualified.
As for why 1-2% MER actively managed funds pushed by banks can drain roughly half of your retirement savings there’s tons of info out there on how compounding effects work and the downsides of active management.
I encourage you to go pay for a qualified financial planner. It sounds like you’ve been lead astray.
EXACTLY. Do you know what compound interest is?
Of course I know what compound interest is. It has nothing to do with broker fees. Broker fees are flat fees you pay for managing a fund. Maybe I don’t get your point?
Between brokers fees & management fees those can easily drain half the value of a mutual fund over 30 years.
You don’t need 1-3% in fees to get lower ROI than a passive index fund with 0.25% MER. But a salesman at a bank will absolutely tell you otherwise.
I understand your point. But whether it’s at a bank or not it’s still the same thing. And it would be stupid for a bank to promote and sell investments that purposefully underperform just to take brokerage fees where the customer ends up losing more money if fees than anything. You’d end up with a class action lawsuit pretty quick.
Both my parents have worked in financial institutions initially as advisors and eventually became certified financial planners. I grew up learning about all the different investments the banks offered and the responsibility they had towards their customers. They wouldn’t pull this kind of crap and always had their customers best interest at heart.
However, my mother did work dor a while in an insurance company as a quality assurance monitor on sales calls for insurance policies. The shit the advisors there would pull was stunning. Now THOSE guys were leeches. Selling resellable insurance plans that would cost the customer so much only to find out they were ineligible in the first place and things like that.
No, a mutual fund with 1-2% MER is not the same as an ETF with 0.25% MER. One of them steals half your money while the other does not.
Believe it or not it is very financially lucrative to drain up to half of people’s retirement funds while disguising it under opaque language they know people won’t understand (like MER, brokerage fees) while “”justifying”” their fees with hopes that they would outperform the market (which they don’t).
Sorry to break it to you but your parents were raised in a world where we had less data on these things. We now know their work over the years drained people of their money and siphoned it up to banks.
They didn’t need to be conscious of it for that to be the effect. That’s simply what happens. And because these are risk adjusted opportunity costs people don’t know better.
Moreover your parents worked in a market when 0.25% MER All in One ETFs didn’t exist. So it’s a moot point.