Clients should be asking about fees

[Slava]

This is a letter written to give to your advisors by Tom Bradley of Steadyhand Investments. I think he notes quite correctly, that now is the time to ask and get some answers.

I know from experience that a lot of people don't know what they pay for advice, or have no idea that there is a cost, that there is a fee for selling investments or things like that. You should know, and this letter (which he encourages you to use and "cut and paste from it, liberally")can help you do that.

https://www.steadyhand.com/globe_articles/2017/02/02/client_manifesto/

[Ace]

Honestly that letter seems to come across with a heavy tone of suspicion/accusation , and seems pretty silly to me.

Is it really so hard to say:

Hi Joe,

Could you please send me a summary of how i'm being charged fees.

Thanks

[Slava]

Honestly that letter seems to come across with a heavy tone of suspicion/accusation , and seems pretty silly to me.

Is it really so hard to say:

Hi Joe,

Could you please send me a summary of how i'm being charged fees.

Thanks

Oh I don't disagree, and its not unlike the Questrade commercials which paint advisors in a poor light (IMO). But it's good for people to know what they're paying, and hopefully this encourages a few people to ask the question(s).

[Imranm]

This letter in nonsense.

As part of the industry's push to CRM2 (client relationship model), fees, performance, etc are all mandated to be on statements.

PLUS - if you really do feel like you need to send that kind of letter to your advisor - you should probably be looking for another one.

[Slava]

This letter in nonsense.

As part of the industry's push to CRM2 (client relationship model), fees, performance, etc are all mandated to be on statements.

PLUS - if you really do feel like you need to send that kind of letter to your advisor - you should probably be looking for another one.

Of course the new requirements are for all of this information to be on the statements, but there are still some portions which aren't disclosed. For many mutual funds the value paid to the dealer is there, but the remainder of the MER (which is almost surely the more significant figure) is not.

I kind of agree that you should be able to call your advisor and chat about these things, and really they should be disclosing everything anyway. That said, there are many clients who have no idea about what they're paying for advice. So while it's one thing to say "these are all disclosed now" people should feel comfortable asking the questions and having the costs explained to them in full.

[MoneyGuy]

I have nothing to add but am just posting so that Slava replies and I get to see his awesome avatar again. He's obviously reduced his posting to the bare minimum. :)

[Slava]

I have nothing to add but am just posting so that Slava replies and I get to see his awesome avatar again. He's obviously reduced his posting to the bare minimum. :)

I really haven't reduced my posting, but I am seriously busy working!

[Johnny199r]

I have an assante advisor I've used for 7ish years. I have substantial assets with him. He provides me with absolutely nothing of value to justify his fee. I have a lot of investment knowledge from my own research now.

I recently opened a questrade account and purchased some etfs. So easy and so much cheaper than the .80% my assante guy charges me to own an etf and a mawer fund through assante.

I'll pull my assante money within the next year and transfer it to my questrade and save thousands.

[Slava]

I can see that line of thinking for sure and the Questrade ads have made that clear. I would suggest that it's kind of an oversimplification though. What I mean is that of course you save money because you aren't getting any service over that period. While I can't say what your current/former advisor does, there should be a lot more than just holding the funds.

[Johnny199r]

I can see that line of thinking for sure and the Questrade ads have made that clear. I would suggest that it's kind of an oversimplification though. What I mean is that of course you save money because you aren't getting any service over that period. While I can't say what your current/former advisor does, there should be a lot more than just holding the funds.

What other services are there? I don't need tax planning, I have disability and life insurance through work, I don't think there's anything he can actually offer me to justify his take.

Obviously this argument wouldn't be applicable to someone who has no investing knowledge and uses an investor. There's value in that situation.

[Slava]

What other services are there? I don't need tax planning, I have disability and life insurance through work, I don't think there's anything he can actually offer me to justify his take.

Obviously this argument wouldn't be applicable to someone who has no investing knowledge and uses an investor. There's value in that situation.

Yeah I am not here to convince you to stick with some other advisor who I don't know and can't tell you anything about. I have no idea.

The insurance aspect is one to be careful with though. I have seen cases where people are relying on coverage through work and it's not quite what they think it is. Sometimes the coverage is shockingly low (for life insurance) and there are a lot of clauses on the disability side that you want to be aware of. Unfortunately though, people don't look and see until there's a claim...and I probably don't need to mention that's too late.

And on the investment side the role of an advisor isn't always to nail the market outlook and make the perfect investment. It's about building a prudent portfolio so that the risk adjusted returns (which are appropriate for you as investor), perform at a level to meet your goals and required return.

Anyway, like I said I am certainly not going to convince you to stick with a guy who might be terrible or amazing.