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Old 03-14-2017, 10:31 AM   #81
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With all due disrespect to banks, they do have the odd good advisor. However, most are sales people who look out for the bank's interests and don't car too much for the client.

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Old 03-14-2017, 10:35 AM   #82
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With all due disrespect to banks, they do have the odd good advisor. However, most are sales people who look out for the bank's interests and don't car too much for the client.
Oh, I'm sure they do, its just that they arent necessarily 'linked' with you and their incentive to work for you is less than what an independent advisor's would be.
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Old 03-14-2017, 10:59 AM   #83
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Ok with all due respect to the advisors on CP, let's not pretend like everyone who is an independent advisor is free from ripping off customers.

In fact, because they tend to have a lot less oversight and are commission based, you may find they have more incentive to rip people off. Places like Investor's Group have been known for years to engage in slimy dishonest high pressure sales tactics.

Bank staff have traditionally been more like shopping at best buy. Their staff are getting paid no matter what and tend lack knowledge.

But independent advisors, like Edward Jones, Investors Group and the like, are the Future Shop/Visions. It is totally buyer beware. You may get A+ service or you may get totally ripped off.

The problem with the current model is that bank staff are being pushed into the world of scummy places that engage in high pressure sales tactics for the sake of $$$. Pretty soon you won't even be able to get the mediocre generic investment advice that banks have been known for.

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Old 03-14-2017, 11:18 AM   #84
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Bank staff have traditionally been more like shopping at best buy. Their staff are getting paid no matter what and tend lack knowledge.

But independent advisors, like Edward Jones, Investors Group and the like, are the Future Shop/Visions.
I was thinking of maybe comparing it to vehicle repairs, and going to Canadian Tire vs going to an independent shop. Where CT generally isn't horrible but you are dealing with rookies who may have their own sales targets, and an independent you would want to know somebody who has dealt there to see their experiences.
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Old 03-14-2017, 11:48 AM   #85
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Ok with all due respect to the advisors on CP, let's not pretend like everyone who is an independent advisor is free from ripping off customers.

In fact, because they tend to have a lot less oversight and are commission based, you may find they have more incentive to rip people off. Places like Investor's Group have been known for years to engage in slimy dishonest high pressure sales tactics.

Bank staff have traditionally been more like shopping at best buy. Their staff are getting paid no matter what and tend lack knowledge.

But independent advisors, like Edward Jones, Investors Group and the like, are the Future Shop/Visions. It is totally buyer beware. You may get A+ service or you may get totally ripped off.

The problem with the current model is that bank staff are being pushed into the world of scummy places that engage in high pressure sales tactics for the sake of $$$. Pretty soon you won't even be able to get the mediocre generic investment advice that banks have been known for.
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I was thinking of maybe comparing it to vehicle repairs, and going to Canadian Tire vs going to an independent shop. Where CT generally isn't horrible but you are dealing with rookies who may have their own sales targets, and an independent you would want to know somebody who has dealt there to see their experiences.
Very good points, they're not all 'Beacons of Virtue' much like not all Bankers are little 'Rat-Men.'

You've got to use your head and thats why you go based on referrals.

The problem in the 'Independent Financial Advising' Industry is that there is very little oversight and very few barriers for entry. Literally, and I'm using the term 'literally' literally, not figuratively, but literally any old idiot can throw up a shingle, connect with one of the major investors and voila! They're a Financial Advisor now.

Its a huge credibility issue, not unlike the one that Tax Accountants experience when a client sits down at H&R Block and slowly comes to the realization that they have more tax experience and knowledge than the guy across the desk preparing their taxes for a fee.

But thats something that the market can help with. You use referrals from people that know an advisor well and decide from there.

I'm not referring my clients to anyone I'm not 100% comfortable with because I dont want them coming back and saying:

"How could you refer me to that idiot? That guy is so stupid he couldnt find his own ass with both hands and a map!!"

Thats not good for me, its not good for the Advisor and its not good for the client. Wheres the winning?

But at the same time you have to account for the fact that that client could be crazy! He could have been trying to invest using his collection of 1930s Kellogg's Cereal Box Tops for all I know.

If someone is making a living at something on their own thats a good indicator that they know what they're doing, but like everything, its not the only indicator. When I refer people I tell my clients:

"Talk to him, meet with him and if you like him, go with it."

You dont get that at a bank. You are trusting the reputation of that Bank and that they will give you someone who knows what they're doing and that can often be a crapshoot at best.

I'm much more willing to trust a person that I've met than a huge multinational bank rolling out employee-bot 00005496134.
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Old 03-14-2017, 01:01 PM   #86
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Ok with all due respect to the advisors on CP, let's not pretend like everyone who is an independent advisor is free from ripping off customers.

In fact, because they tend to have a lot less oversight and are commission based, you may find they have more incentive to rip people off. Places like Investor's Group have been known for years to engage in slimy dishonest high pressure sales tactics.

Bank staff have traditionally been more like shopping at best buy. Their staff are getting paid no matter what and tend lack knowledge.

But independent advisors, like Edward Jones, Investors Group and the like, are the Future Shop/Visions. It is totally buyer beware. You may get A+ service or you may get totally ripped off.

The problem with the current model is that bank staff are being pushed into the world of scummy places that engage in high pressure sales tactics for the sake of $$$. Pretty soon you won't even be able to get the mediocre generic investment advice that banks have been known for.
I don't want to comment on specific companies, but I will be completely honest and say that "my" industry has done itself no favours through the years. That and there are some companies whose business model is really just stunning. Like one day the person is a butcher and the next day (with no qualifications of any stringency) they're planning peoples retirements and allocating hundreds of thousands of dollars. It's really shockingly lenient.

The fight across Canada at this point is for a "best interest" standard, where advisors would have to adhere to a policy of holding their clients best interests first. To me (and I would guess for almost every consumer) that seems like something we all figure is the case anyway. Yet, there are companies and advisors lining up to fight against that. I don't even know on what basis you could argue that you shouldn't be doing that...but here we are.

And to your point about some of these companies and their level of service/products, etc. and independent advisors in general, there is an important distinction to be made. Some of these companies sell proprietary products as opposed to being able to use what fits the client best. That is a significant diversion from independence. When you have to use certain products because your getting a pay cheque depends on it, then I can't see how that makes you independent.
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Old 03-14-2017, 01:14 PM   #87
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I'd like to write something more detailed regarding the defence of banks but I can't for the next few hours.

Not naming any specific companies but I'm pretty sure the company Slava is referencing in this first paragraph starts with a P and rhymes with America.
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Old 03-14-2017, 01:16 PM   #88
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I'd like to write something more detailed regarding the defence of banks but I can't for the next few hours.

Not naming any specific companies but I'm pretty sure the company Slava is referencing in this first paragraph starts with a P and rhymes with America.
This comes as a shock and surprise to absolutely no one.
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Old 03-14-2017, 02:20 PM   #89
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An investor-rights group is now filing a class-action suit against TD on behalf of U.S. shareholders because of the impact this is having on share prices.
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Old 03-14-2017, 03:09 PM   #90
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I'd like to write something more detailed regarding the defence of banks but I can't for the next few hours.

Not naming any specific companies but I'm pretty sure the company Slava is referencing in this first paragraph starts with a P and rhymes with America.
Well not only them, but there are a number of companies I would group as similar. I just think that advisors selling proprietary products should be forced to disclose that this is all they are selling. I find it appalling that the "best interest" standard can be logically opposed by anyone and more than anything I would LOVE to see advisors who must act as a fiduciary.

It is so bizarre the way the industry has gone though. Any other profession and you can't just decide that is your title because you need to qualify. You can't just decide that you're a doctor or lawyer or engineer. Yet for some reason we've allowed just anyone to decide they're investment advisors or financial planners or whatever other title they want to use, with very little in terms of qualifications and an enormous responsibility for the welfare of their clients.

Anyway....I should avoid this topic because it really frustrates me and makes my blood boil!
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Old 03-14-2017, 04:19 PM   #91
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Ok with all due respect to the advisors on CP, let's not pretend like everyone who is an independent advisor is free from ripping off customers.
No one is denying that. There are bad advisors on this side, too. You're correct.

On oversight: In fact, because they tend to have a lot less oversight and are commission based, you may find they have more incentive to rip people off.

Neither of knows exactly how it is on the other side but I suspect it's very similar except we're free of influence from any employer as we have no employer. We're subject to a lot of regulations and scrutiny.

You mention IG and Edward Jones as if they're independent. They're not by my definition. So far you're only mentioning companies that I have an issue with for many of the reasons you cite. There are lots of great independent companies out there that, from the consumer's point of view, are great choices. I'm with my firm (same as Slava's) for various reasons but there are many others to be respected.

Question for you.... If you could run your own business the way you want, work with clients of your choice, give them great investment and planning advice without any influence, double your income, and own a business that you can sell one day, why not? There are bank advisors who would be great independents but there is no income to start and no employer benefits. Family and financial commitments, right? I can respect that reason. I've had bank advisors tell me that they'd do it except no clients to start means no income, but the huge potential isn't worth the risk.
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Old 03-14-2017, 05:22 PM   #92
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I'll chime in on the advisor thing because that was the specific area I worked in.

The man/group I worked for was an excellent advisor who gave honest advice and stood by his word. Individually, himself, I had no problem working for him and enjoyed it actually. If any one wants his name I would gladly give it and if I had enough money, I would probably hold it with him.

That said, the companies themselves definitely have an overall feeling of "CLIENT FIRST!* but not really*). When you have company wide meetings and workshops, it was more about HOW YOU CAN EXPLAIN why this product is a benefit vs WHY this product is a benefit.

And then comes an issue that someone brought up earlier and that is, these front line people really don't make very much base salary. The banks get away with that by giving these types of performance based incentives to people in positions that really have no business selling anything.

The way banks pay their "lower ladder" people is actually what eventually drove me to leave. Not just my personal pay (although, for working in a team managing almost $1b dollars and dealing with the work involved in that, I was definitely not happy with my pay), but that of people that do a whole buttload of work, but it's menial paperwork and stuff so they can really get anyone to do it. But it's still absolutely vital to everything that goes on. Many of those people were immigrants and they had to have TWO JOBS to support a family. No employee at a multi-billion corporation should have to do that IMO. I don't care if you are a teller or the top executive. You spend 40+hours of your week at this company, zero people should need to work anywhere else to lead a very modest standard life.
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Old 03-14-2017, 07:25 PM   #93
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Insurance companies and advisors are another story. Many are out for themselves.
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Old 03-14-2017, 08:45 PM   #94
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I have to ask - and I am not looking to start a fight here, I am truly curious as to the discussion and your thoughts on this - but are you not licensed through a major financial institution, Slava? And MoneyGuy, who is your dealer? (without naming names)

The reason I ask is that I don't think anyone who is licensed through a product provider is, or can be, truly independent.

In order to be truly independent, an advisor needs to be a true fiduciary, with no ties or relationships of any kind with any financial institutions. I find that, in our industry, the word independent means as independent as possible, instead of truly independent.

And of course - as you mentioned earlier Slava - the lack of clear definitions is a real problem. Anyone can call themselves an advisor or a planner - and even a portfolio manager.

It's a dog's breakfast.
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Old 03-14-2017, 09:27 PM   #95
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^ Yeah I am licensed and have my licenses sponsored through Manulife. But it is independent in the sense that I don't have to use any of their products at all. So for example I am licensed through IIROC, and clearly clients can hold shares of any publicly traded company and don't have to own Manulife. Same goes for ETFs or funds. I think that's a huge difference, and I would have to look to be specific but I would say the vast majority of my clients aren't​ holding any Manulife shares or funds.

Insurance is the same and I have the freedom to use a pile of different companies. I would say it's theoretically almost anyone, save for a couple purely proprietary providers. In practice though it comes down to the larger well-known companies for the most part, and based on price for quite a few clients I do use a lot of Manulife. That's definitely not exclusive though, and I have no bias of compensation there. It's just either more sensible, or plain cheaper or whatever the case maybe.

I think it's about as independent as one can be though. Ideally I would be 100% solo and have no dealership and no sponsor for my licenses, but I haven't figured out how to do that just yet! If you have and can point me in the right direction I would be thrilled to learn how to make it happen!
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Old 03-14-2017, 09:41 PM   #96
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^ Yeah I am licensed and have my licenses sponsored through Manulife. But it is independent in the sense that I don't have to use any of their products at all. So for example I am licensed through IIROC, and clearly clients can hold shares of any publicly traded company and don't have to own Manulife. Same goes for ETFs or funds. I think that's a huge difference, and I would have to look to be specific but I would say the vast majority of my clients aren't​ holding any Manulife shares or funds.

Insurance is the same and I have the freedom to use a pile of different companies. I would say it's theoretically almost anyone, save for a couple purely proprietary providers. In practice though it comes down to the larger well-known companies for the most part, and based on price for quite a few clients I do use a lot of Manulife. That's definitely not exclusive though, and I have no bias of compensation there. It's just either more sensible, or plain cheaper or whatever the case maybe.

I think it's about as independent as one can be though. Ideally I would be 100% solo and have no dealership and no sponsor for my licenses, but I haven't figured out how to do that just yet! If you have and can point me in the right direction I would be thrilled to learn how to make it happen!
Let me be clear: I am not directing this at you, this is directed at the industry, but can one be truly independent when they are licensed through a financial institution that has products to sell?

I have no doubt that you act in an independent manner and put your clients best interests first. That is not up for debate, and is not my point.

My point is that the structure of the industry is still drastically flawed. The idea that someone is supposed to be independent, while being licensed through a company that isn't independent, is a pretty silly model. (Again, I am not saying it's silly of you, I am saying the way the industry licenses independent advisors is flawed - that is not the fault of the advisor).

As to the bold, the way to be truly independent is to be licensed by an independent firm. In Canada right now, that means an Investment Counsel. However, that does not mean that Investment Counsels are all independent (unfortunately) - most are actually very proprietary.

What we need in Canada is a platform of licensing that is completely independent, and that the public knows and can trust is completely independent. Like the fiduciary license in the US.

But I doubt we'll see that anytime soon.
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Old 03-14-2017, 09:52 PM   #97
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Yeah I don't disagree or take any offense at all. I just work within what we have here as far as licensing and regulation goes. I guess I can see how there's a perceived conflict there, but there really isn't one. If there was pressure to use their products then yes, it would be a different story. As it stands though we're free to use whatever we want, and there is no difference in terms of compensation. I do think that's a major factor as far as independence goes.

I would like to just license directly with ASC and not have to deal with a dealership at all, for many reasons. Some business and how I would run things and some just purely in terms of costs for me. It's a difficult thing to setup though, as far as I can tell at this point. I think that eventually I will move in that direction in one form or another though.
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Old 03-14-2017, 10:00 PM   #98
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Licensing and regulations are so complex I'm not sure if it is realistic to expect most advisors to be independent.

Much as we all hate financial institutions dealers like manulife do a tremendous amount of the compliance work.

I think getting rid of them would only increase the amount of sketchy advisors. Then some of the less honest people would have absolutely no oversight at all. At least their dealer shares some of the responsibility to ensure they don't screw over everyone.
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Old 03-15-2017, 05:06 AM   #99
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Licensing and regulations are so complex I'm not sure if it is realistic to expect most advisors to be independent.

Much as we all hate financial institutions dealers like manulife do a tremendous amount of the compliance work.

I think getting rid of them would only increase the amount of sketchy advisors. Then some of the less honest people would have absolutely no oversight at all. At least their dealer shares some of the responsibility to ensure they don't screw over everyone.
I don't agree with this at all.

As an independent firm, we are completely responsible for our own compliance. That doesn't make us 'sketchier', or reduce the amount of compliance, it makes us more understanding of the compliance laws and their intent. The amount of oversight doesn't change, the only difference is that we don't have a financial institution doing it on our behalf. Therefore we have to do it all ourselves, making us far more cognizant of the rules and their intent.

Your suggestion that there would be some with 'no oversight at all' completely misses the mark on how things actually work. Independent compliance does not mean less compliance. In fact I would argue it means more.

Also, I would argue that the idea that the financial institution is taking care of your compliance goes back to the comment that Slava made about being independent - if they are taking care of an important function on your behalf, that makes you less independent, by definition.

To your comment of 'increasing the amount of sketchy advisors', this is ridiculous.

One: an advisor's 'sketchiness' is a function of their own actions, and is independent of who is doing their compliance.

Two: in my 25 years of experience with this, I have found the opposite to be true, that the sketchiest of advisors are typically found where their own input into compliance is minimized. It is the firms that 'take care of everything' and just send sales people out there to flog product that attract the worst kind of advisors.

Three: Sketchy advisors who actively want to avoid regulation can actually do so, by migrating to the EMD space. This is a separate problem that having financial institutions taking care of compliance does not avoid.

In fact, I would go so far as to say your comment is offensive. Truly independent advisors, those that have built their own firms and are no longer under the umbrella of a financial institution, tend to be the best of the business, not the worst.

The problem, IMO, lies more with those who work under the protection of major firms and are just out there flogging product without a care or a responsibility towards compliance. Many advisors at the big firms don't have a clue what the regulations are or their intent. (This is a much bigger problem at the Primericas, WFGs and IGs of the world than the Manulifes)

They don't need to know under the current system.

Again, none of this is an attack on individual advisors. The good ones do the right thing within the framework of how the industry is structured. The issue here is with how the industry is in fact structured.
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Old 03-15-2017, 07:51 AM   #100
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Not sure why we even need financial advisors when everyone knows they should be 100% in Bitcoin
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