Category: Investing

I agree with Rob Carrick that better disclosure of mutual fund fees and rate of return is worth the extra cost to investors. I’ve already written in the past however, that while I think more mutual fund fee disclosure is good, I doubt it will make much of a difference.

Most investors don’t read anything other than the account balance on their statements.  Even if an investor does read about trailer fees and rate of return, they would still need to know what the numbers mean and if they are paying an amount appropriate to the service they are getting.

I can’t get people to look at their investment statements, but I can explain mutual fund trailer fees and personal rate of return.

What are mutual fund trailer fees?

Trailer fees are ongoing fees which are taken out of each mutual fund you own and paid to the company your advisor works for.  The advisor will receive a cut of the trailer fee.

Most equity funds charge 1% annually which is based on the daily balance of your fund.  If you have $100,000 of mutual fund A and that balance never changes – you will pay $1,000.00 in trailer fees in one year.  Of course, all mutual funds do change value on a regular basis, so the trailer fee calculation is done on each business day.

The important fact to know is that these fees are taken out of the mutual fund itself and is reflected in a slightly lower price for your funds.  The fees are not currently shown on statements and you will never be asked to pay the fees directly.

It’s very easy for an investor not to realize that trailer fees exists.  It’s kind of like getting a paycheque which only shows your net pay and doesn’t indicate the gross pay or any of the taxes taken out.

What is a mutual fund personal rate of return vs the rate of return for the fund?

A mutual fund return is the investment performance as calculated for a mutual fund.  A personal rate of return is a combination of the mutual fund return and the activities of the investor.

For example a company might advertise that a fund has a “12% annualized five year return”.  This means that if you bought this fund exactly five years ago and didn’t do any other transactions, your return would also be 12% annualized.

But what if you bought it four years ago?  Is your personal return still 12% annualized?  It’s possible, but not likely.  If a good chunk of the positive five year return occurred in that first year, then your four year annualized return will be lower than 12%.

The other factor is your activities with the mutual fund.  When you buy mutual funds, do you purchase a lump sum and then never make more purchases or take money from that fund?  Because all transactions you do in a fund will affect your personal rate of return.

How to get investors clued in?

The most effective way to get investors to realize how much they are paying in commissions of any type is to get them to pay the fees directly.  Currently the fees all come out of the mutual fund and the investor never “pays” any fees and in most cases, have no idea how much the fees are or that they even exist.

Banning imbedded fees would mean that the financial industry would have to charge these fees directly to the investor, as in the investor will have to write a separate cheque for the money.  This won’t help the issue of an investor not knowing if they are getting a good deal, but they will definitely know how much they are paying.

Explaining the rate of return is difficult.  One suggestion would be to put the benchmark return on the statement along with the fund return, but even that is tricky.  If you own a mutual fund, the fees go to pay the administration and portfolio management of the fund as well as paying your advisor.  Those fees will be taken out of the performance of the fund, so it’s apples vs oranges to compare an active mutual fund you have purchased through an advisor with a do-it-yourself ETF.

Are you getting value from the advisor? Are they helping with tax info, asset allocation? You are paying for these services through the fees which impact returns. It might be worthwhile, but that’s something you have to evaluate yourself.

What do you think?  Will more disclosure of these fees make much of a difference?

Last weeks much anticipated Facebook IPO ( Initial Public Offering – otherwise known as the day Facebook sold part of the company to the public) ended up being a crushing disappointment.  Or so it would seem to anyone reading the negative business media. 

I’m of the opinion however, that the IPO was a huge success.

To understand why I thought the IPO was sucessful, you have to understand how IPOs work.

When an investor buys shares of a company which trade on a stock exchange, they buy them from another investor (not from the company). 

When the owners of a company decide to go public, it means they will sell a certain percentage of the company to the public in the form of shares.  If you can buy shares of an IPO, you essentially buy the shares right from the company (instead of from another investor). 

Typically a company that wants to do an IPO will hire at least one investment bank to facilitate the deal.  For a generous fee, this investment company will figure out the valuation of the company, gauge interest in the stock and will help determine the IPO share price and will line up buyers for the IPO shares.

To put this in a common analogy – imagine if you want to sell your house.  You might hire a real estate agent, they will do some analysis on the house value and will work to sell the house for you.  It’s possible they might even have some potential buyers lined up.

I’ve written too many articles about the huge conflicts of interest that real estate agents face, and investment banks that are handling an IPO have the exact same conflicts.

The seller of a business wants to get the highest price.  That is typically their one and only concern.  The problem with investment banks is that they play both ends of the field – they want to get the IPO business, but they also want to underprice it as much as possible so that they can sell it more easily and so their clients will make a guaranteed profit when the stock jumps up to the true market value.  These clients will be lining up to participate in more IPOs and this works out really well for the investment banks and their favoured clients who can profit from the IPO shares.

But it doesn’t work for the company that is selling.  There have been many examples in the past where a company was valued by the investment banks (and presumeably the company owners) at a certain price, but then the market has priced it higher.  This means that the selling owners have left money on the table.  It also means that most private investors who can’t get in on the favourable IPO price, miss out on the ‘great deal’ which was only available to richer investors.

As it turns out, the big short term winners of the Facebook IPO were the owners of the company who sold their shares for more than the market valued them and the small investors who now have the opportunity to buy the shares for a price lower than the IPO.

Investment returns aren’t supposed to be guaranteed, so in this case the IPO process worked just fine.

 

I received a very interesting email from Sandra recently [edited for privacy and to combine several emails] who is trying to locate a locked-in retirement account from 20 years ago:

Hi Mike…How can I find a lost vested pension when I don’t know who the RRSP account was with?

I worked at Company A until 1993 and my pension was vested after 5 years. Company A was 51% owned by Company B, who have not been much help, and has since been sold to Company C, who has also not been much help.  I have left messages with no call backs.

When I left the company in 1993, payroll handed me ( a very much younger, stupider version of me) a big envelope full of documents and told me my pension was invested in an RRSP until I turn 65 and I didn’t have to “move it” then. I could leave it with them and “move it” when I wanted to.

The years have flown by, I’ve moved a few times, and now I’m in my 50’s, the company is no more, and I have tried a few avenues to find this without much luck. I have tried the Bank of Canada, the Securities Commission of Ontario and the insurance carrier I remember dealing with then, who also has no record. I didn’t think this task would be so difficult. Any wonderful suggestions I haven’t thought of, or phone numbers, web sites, etc. you can think of?

What kind of retirement account is she talking about?

Sandra worked for an employer that provided a defined benefit (DB) pension plan.  This is the type of pension where usually both the employee and employer make regular contributions to the pension plan on behalf of the worker.  Once the employee reaches retirement age, the pension plan will start making regular pension payments to the retired worker until they die.

If an employee contributes to a defined benefit pension plan for a short time and then leaves the company, at a minimum they will have their “pension credits” or the value of the contributions transferred to a locked-in retirement account, otherwise known as a LIRA.

It’s also possible that they could leave the money in the pension plan and then collect a reduced pension once they reach retirement age.

How to find a locked-in retirement account

Every defined benefit pension plan and locked-in retirement account is regulated according to either a provincial or a federal pension standard regulator.  In Sandra’s case, she worked in Ontario and the pension plan was regulated by the Ontario regulator.

The Financial Services Commission of Ontario (FSCO) is the government body that looks after pensions in Ontario.  They have records of every pension regulated by Ontario, even if the pension plan no longer exists, as was the case with Sandra’s.  If you have any information about the original company, they should be able to tell you who was responsible for that pension plan and can provide contact information for the pension administrator or custodian.

I called the FSCO at 1-800-668-0128 and asked if they knew who the pension administrators for Company A (the company Sandra worked for) were.  They were able to tell me the company name of the current administrators of the pension (which turned out to be Company C) and gave me the name and phone number of the administrator.

I called the pension administrator’s number and left a message which was returned the same day.  The pension administrator I talked to was able to confirm that Sandra was in their system and gave me the name and phone number of the financial institution where her LIRA was being held.

I gave the financial institution information to Sandra and she was able to call and regain access to the retirement account which had a value of approximately $24,000.

 

 

Here are the pension regulators for all the provinces and federal pensions:

• Alberta – Government of Alberta Finance – 780-427-3035 (toll free in Alta 310-0000)
• British Columbia – Financial Institutions Commission – 604-660-3555
• Federal – Office of the Superintendent of Financials Institutions Canada (OFSI) – 1-800-385-8647
• Manitoba – Office of the Superintendent Pension Commission – 1-800-282-8069 ext. 2740
• New Brunswick – Office of the Superintendent of Pensions – 506-453-2055
• Newfoundland and Labrador – Pensions – 709-729-1039
• Northwest Territories  – Office of the Superintendent of Financials Institutions Canada (OFSI) – 1-800-385-8647
• Nova Scotia – Nova Scotia Pension Agency – 1-800-774-5070
• Nunavut  – Office of the Superintendent of Financials Institutions Canada (OFSI) – 1-800-385-8647
• Ontario – Financial Services Commission of Ontario (FSCO) – 1-800-668-0128
• Prince Edward Island – Public Sector Pension Plans
• Quebec – Supplemental Pension Plans – 1-877-660-8282
• Saskatchewan – Saskatchewan Financial Services Commission – 306-787-5645
• Yukon – Office of the Superintendent of Financials Institutions Canada (OFSI) – 1-800-385-8647

Other suggestions to locate a lost investment account

At this point in the article, you might think I’m some kind of lost retirement account expert and was able to find Sandra’s account without any difficulty.  In actual fact, there were a number of other things I tried as well.

1. Call around – In one of her emails, Sandra had asked if the CRA would be able to help.  I wasn’t sure if they would help, but my first phone call was to the CRA tax line 1-800-959-5525.  I knew they wouldn’t know where the missing account was located, but I hoped they would point in the right direction.  They transferred me to the CRA RRSP division and the person there told me to call the FSCO.  THE FSCO ended up being the correct starting point for this mission.
2. Call the pension administrators of all the companies involved – Before I heard back from the pension admin from Company C, I also called the pension administrators from Company B.  They couldn’t tell me anything due to privacy concerns, but had Company C not come through with the correct information, I would have had Sandra call the Company B pension admin to see if they knew anything.
3. Google the company/industry – This might help find related companies or in the case where you only know the industry, you might get some ideas about companies to try.
4. Call every financial institution – A last-ditch suggestion is to start calling financial companies that might have the missing retirement account and hope for the best.  Start with the big insurance companies and big banks and see what happens.  Make sure you tell the whole story to whoever will listen and you might pick up some good advice along the way.  The Office of the Superintendent of Financials Institutions Canada (OFSI) financial institutions list is a good place to start.

What if I don’t know the company name?

If you are involved with an estate and you don’t even know the name of the company that the deceased person worked for, I would suggest calling the CRA and pension standard regulators anyway and see if they come up with any ideas.  If you know where the person lived or what type of industry they worked in – that information might be used to narrow down the search a little bit.

Financial institution client privacy rules

Note that financial institutions cannot give any kind of information about a client to anyone who is not the client.  If you are trying to locate an account as part of an estate, get ready for a whole pile of hassle because of this.

The pension administrators of Company C shouldn’t have verified with me that Sandra was in their pension system because of these privacy rules.  Had they not told me where her retirement account was located, I would have just given the contact information to Sandra and she could have still gotten the information.

Use the right terminology or tell the whole story

One of the problems with trying to find a financial account is that if you aren’t using the right terminology, the people who can help you might not realize what you are talking about.  There isn’t much you can do about your financial lingo, but one suggestion is to tell the person the whole story.

In Sandra’s case, her first email was fairly short and just talked about a lost vested pension and a RRSP account.  I have no idea what a “vested pension” is and as it turns out, there never was an RRSP account.  However, I had a suspicion that she might be talking about DB pension that was transferred to a LIRA.  I asked for more details and when she explained the whole story, it was very clear she was looking for a LIRA.

At that point, I wasn’t sure where to start looking, but at least I knew what I was looking for.  🙂

Brief primer on locked-in retirement accounts (LIRAs)

A LIRA is similar to an RRSP account in that it is tax sheltered.  However, no contributions can be made to the account and withdrawals aren’t normally allowed either.

For information on how to access money in a LIRA – please read How to Unlock An Ontario Locked-In Retirement account.  The article is still relevant for LIRAs not regulated by Ontario and has links to further information regardless of where the account is regulated.

 

I like to calculate my investment return each year, so I can see how I am doing.

My investment return for 2011 was -1.8%.  While this kind of performance won’t secure my retirement any time soon, I was lucky that the numbers weren’t any worse.

There were two reasons, I did reasonably well.

1. Low Canadian exposure.
2. Over weight in cash for a good part of the year.  This wasn’t exactly planned and it cost me money last year.  This year, my mistakes worked to my advantage.

Low Canadian equity exposure

I’m not a believer that Canadians should have a lot of money invested in Canada.  In my mind, this is kind of like buying your employer’s stock.  If they go down – you go down too.  Diversification is my number one goal and that includes having a lot of money outside Canada.

It may seem that it is safe to own Canadian dollars if you live in Canada, but what happens if the Canadian dollar falls and the price of any imports goes up accordingly?  How will you handle that scenario?  I handle it by keeping less than half of my retirement portfolio in Canuck bucks.

My portfolio is loosely based on the Canadian Capitalist’s sleepy portfolio which returned -1.2% this year. I’ve made a few changes from his portfolio and this is what my desired allocation is:

Asset class	ETF	Target (%)
Bonds	XSB	20
Real return bonds	XRB	5
Canadian equity	XIU	11
US equity	VTI	32
International equity	VEA	32

Overly high cash allocation

In actual fact, I never had less than about 25% in bonds/cash and had over 50% bonds/cash for most of the first half of the year.  There were two reasons for this – I neglected my portfolio in 2010 and never reached my desired equity allocations, so I started 2011 with too much cash.  Then I did a sizable transfer in to my discount brokerage account at a time when the market seemed pretty high.  I knew I should just buy, but I couldn’t do it and waited several months.  As the market fell, I kept buying.

At this point in time, my portfolio asset allocation is as follows.

Asset class	ETF	Target (%)
Bonds/cash	XSB	27.8
Real return bonds	XRB	4.5
Canadian equity	XIU	10.7
US equity	VTI	29.6
International equity	VEA	27.3

 

The next step

I’ve recently made a couple of extra RRSP contributions (hence the higher cash level).  I will likely make one or two more contributions in the new year and then I will do some rebalancing.  I plan to be more active in 2012 and stay on the asset allocations.

Past returns

Here are my returns from the last six years:

Year	Return(%)
2006	14.7
2007	4.1
2008	-17.0
2009	20.24
2010	7.3
2011	-1.8

My annualized rate of return over the six years is 3.87%. At that rate, $100,000 invested six years ago would now be worth $125,560.
The rate of inflation over the last six years has been pretty low at just under 2%, so my annual real return is about 2%, which isn’t great, but isn’t bad either.

Stay the course, regardless of your investment style and save a lot

I’ve done two things well with my investments:

1. Stay the course – I haven’t sold anything in the last six years and I’ve had more or less the same plan.
2. Make lots of contributions – I make regular contributions, and some extra when I can.  My investment savings rate is about 20% of our gross income.  This will likely go up now that my mortgage is paid off.

 

If you follow the business media, you will notice that they tend to exaggerate everything and take things out of context. Stocks don’t drop one percent, they “drop sharply”. Recent market declines are usually measured from the most recent peak – regardless of how recent or short-lived that peak was.

If you left the design of elevator buttons to the financial media, there would be no “Up” and “Down” buttons – they would read “SOAR!” and “PLUNGE!”.

Let’s look at the American stock market this year

The S&P500 hit a high on April 29 of this year. Over the next five months, it proceeded to shed almost 20% of it’s value before bottoming out on October 3rd.

If you were watching the news on October 3rd, you probably would have heard how the stock market is down almost 20% from the peak, which brings it close to bear territory.  And in only five months. Scary stuff! It would be tempting to panic after hearing those numbers.

However, that time period is somewhat arbitrary and very short term.  Since October 3rd, the S&P500 has gone up again and is only down 9% from April. That still doesn’t sound very reassuring, although it’s a lot better than being down almost 20%.

Let’s look at the return over a slightly longer time period. From the beginning of the year, the S&P500 performance including dividends is roughly zero percent. Does it still sound like it’s time to panic?

But wait, there’s more! Canadians who invest abroad in unhedged investments also experience currency changes. This doesn’t always work out well – check out any 5-10 year American investment returns in Canadian dollars for an example. But this year is different – the Canadian dollar has lost ground against the U.S. dollar since the beginning of the year and that means your U.S. investments have an automatic currency gain.

For example if you owned the Vanguard US stocks ETF (VTI), you might notice that the price in US$ has gone from $64.93 at the beginning of the year down to it’s current price of $64.51 – a drop of about one half of one percent.

However, if we convert US$ to Cdn$, we find out that the current price of VTI is $65.67 Canadian dollars.  The price at the beginning of the year was $64.84 in Cdn$

This means that your VTI return year-to-date in Canadian dollars is 1.3% not counting dividends. Ok, so that return might not win any stock picking competitions, but it’s no reason to panic.

Don’t let the media analyse your investment performance – figure it out on your terms.

Workers who don’t have access to a defined benefit pension are often quite jealous of workers who do. We wish we had something similar, so that we wouldn’t have to worry about our retirement income.

A defined benefit pension is where a worker makes regular mandatory contributions during their working career and then receives a guaranteed paycheque in retirement.

Annuities are a pretty good solution for people who want a defined-benefit-like income stream in retirement. Moshe Milevsky and Alexandra MacQueen took a detailed look at how to incorporate annuities into your retirement plan in their excellent book – Pensionize Your Nest Egg.

But for some reason, annuities aren’t very popular. There are many retirees who would benefit from converting some or all of their retirement portfolio into annuities, but most don’t.

An annuity is an insurance product where you pay an upfront fee in exchange for guaranteed payouts until you die.

The mystery of why more seniors don’t buy annuities is referred to as the annuity puzzle.

Why people don’t like annuities

The problem is that people who have been saving money for a long time and have accrued a nice little nest egg, have a hard time handing over a big chunk of cash for an uncertain return. What if they die two weeks after buying the annuity? What if their investments get really good returns after they convert them into an annuity? What if they change their mind? (annuities can’t be “unbought”).

Another issue is lack of knowledge – not many retirees know what an annuity is or how they work.

Some people don’t like annuities because they usually don’t payout any money to their heirs.

Buying an annuity is too difficult a decision for most people and that’s why most Canadians that should buy some annuities, don’t.

Why do people with defined benefit pensions not have the same issues?

On the flip side – someone who works for an institution that offers a good defined benefit plan gets used to the idea from the very beginning of their career that they are making contributions in exchange for a future income stream in retirement. They don’t have to worry about making a wrong decision about their life expectancy, because there is no decision to make.

Leaving their “pension pot” to heirs is not a decision that someone with a defined benefit plan has to deal with, because in most cases it won’t happen.  It’s not uncommon for a spouse to be eligible for a reduced survivor’s pension, but once that surviving spouse dies, the pension dies with them.

Unless their defined benefit plan contains a survivor’s benefit, they have no concern that those contributions won’t be able to be passed on to the next generation.

Another factor is that defined benefit workers are buying their future income stream one paycheck at a time in small palatable dollar amounts.  Buying a pension with an $800 deduction from your paycheque each month is psychologically a heck of a lot easier than buying the equivalent annuity at age 65 for $650,000.

Most people with defined benefit plans don’t have an appreciation of the amount of money their pension is worth. It’s not uncommon for a retiring government employee to have a pension “pot” that is worth between one and two million dollars. But that employee never sees that money total in an account. They just see their retirement income stream in the form of cash payments once or twice a month. Perhaps they get $45,000 per year from their pension. Most retirees don’t equate their pension money with a large nest egg, so the thought of losing that money if they die early isn’t really a problem for them.

How to solve the annuity puzzle?

More knowledge about annuities would help. People without defined benefit pension plans have to understand that defined benefit pensions and annuities means no inheritance for that money. You can’t have your cake and eat it too.

Retirees have to learn that in order to get a decent guaranteed income stream, you have to fork out a lot of money.

If a retiree wants to leave money after their death, they have the option of only converting some of their money into annuities.  The remainder can stay invested in traditional investments and will be available to be passed on when the retiree dies.

There aren’t really a lot of differences between a defined benefit plan and an annuity. If you could buy an annuity starting at an early age (ie with monthly contributions) that doesn’t pay out until you are 65 (or some agreed upon age), then guess what – you have a defined benefit plan. In reality an individually purchased annuity will likely cost more than a defined benefit plan, but on the other hand – a person who saves their retirement money in an RRSP has more flexibility in terms of when they buy an annuity and what percent of the portfolio they convert to an annuity. They can also buy multiple annuities over time.

Conclusion

We tend to look at the good parts of defined benefit pensions and ignore the bad parts.  Kind of like admiring your neighbours lawn and wishing your lawn looked as green as his, but ignoring the fact that he spends three hours every weekend working on it.

If you have a decent-sized retirement portfolio and no guaranteed pension, annuities likely should be part of your investment plan.

Do you know anything about annuities? Would you consider them for your retirement plan?

Rob Carrick recently wrote an article called Let’s stop hiding the cost of mutual fund fee in which he suggests that unbundling advisor commissions from mutual fund fees will allow investors to understand how much money they are paying for financial advice.  This is a good idea and is in the works for England and Australia by the end of 2012.

Paying a separate cheque to your advisor will make their compensation about as visible as it can be.  However, I’m not convinced that it will be enough.

To benefit from more fee disclosure, investors have to know the dollar amount of fees they are paying their advisor AND the cost of alternatives and the cumulative effects of the difference.  How many investors have any idea how much bigger their retirement pot would be if they could save one percent on their investment costs per year?

Annual fees don’t seem significant

Most investment costs are quoted in percentages and 2% per year doesn’t seem like a high fee when compared to other common percentage charges such as sales tax, income tax.  It’s the cumulative charge over time that matters.  An investor may not think that saving 1.0% per year is significant, but if she knew that over 25 years, the saving would create 27% more money for her, that would mean something.

What are the cheaper alternatives?

If my mechanic quotes me a price for labour and some engine part that I’ve never heard of, how do I know if I’m getting a reasonable deal or not?  An inexperienced investor might not question an investment charge because they have no idea if they are getting a deal or not.   How many Canadians know that advisor commissions are negotiable if you have enough money?

This investment knowledge is something that can’t be regulated and the lack of it reduces the effectiveness of fee disclosure.

What should an investor get for his investment fee?

One of the secondary issues with high Canadian investment fees is the question of how much advice investors are getting for their money.  You can justify any fee if there is enough service provided, but that doesn’t seem to be the case.  A lot of investors use a financial advisor to select investment products and don’t get any real financial planning.  How can the government educate those people that if they are paying a full service fee, they should be getting full service investment advice?

Summary

Separating advisor compensation charges from mutual fund company fees is a step in the right direction.  I’m not sure if it will really help most investors by lowering their investment fees or by increasing the amount of financial advice they get.  The reality is that there are a fair number of lower cost investment products available in Canada and the majority of Canadian investors are just not interested.

 

Related articles

Should financial advisors disclose their commissions?

Better investment fees and performance disclosure might help

I received a question from Lily Leung of ExploreForAYear.com who asked about finding a fee-only financial advisor in Toronto for a younger investor:

Quick question on financial advisors – a friend was asking me about how to a financial advisor (she’s in Toronto), do you have any suggestions on resources on:
1.) How to select an advisor
2.) Directory of financial advisors (esp. fee-based ones)?

First of all – the type of advisor she is talking about is one who charges for specific services. For example they might charge $300 for a financial plan. This type of advisor typically won’t handle the actual investments. They are like financial architects – they draw up the blue prints and then you (or someone else you hire) has to start building.

I don’t think the fee-only advisor business model has been all that successful in Canada.  It might be easier to find a commission-based advisor who also has a fee-only advice service.

Here is a list of Canadian fee-only financial planners.

Fee-only advisors are not perfect

Word of warning – Fee-only advisors may not have conflicts of interest because of commissions from investment products, but they do have a conflict because of their fees.

The more financial analysis they do for a client, the more they can charge.  I think for someone who is in their 20’s, having a detailed financial plan is useless because there are just too many unknowns in your future.

An expensive financial plan might be a good idea for someone who is about to retire, needs to get a handle on their finances and has a good idea of what their retirement income, needs are.

For most young people, the “rules of thumb” are as good as any detailed financial plan.  Avoid/reduce debt, save 10% of your income is a great start.  An advisor can give good advice about investing ie how to set up an appropriate portfolio, risk level etc.  But it shouldn’t cost too much.  I wouldn’t spend more than a couple hundred dollars for an analysis if you are in your 20’s.

How to find an advisor – resources

These articles will provide a good background for someone who is looking for a new financial advisor of any type:

• Different types of Canadian financial advisors
• How financial advisors get paid
• Canadian financial advisor qualification courses
• How to do a background check on a Canadian financial advisor
• Canadian discount brokerage comparison – This will help you choose which discount broker to use after consulting with a fee-only advisor.

Here is an interesting case study by Canadian Capitalist where he actually tries to find a fee-only financial advisor:

• Finding a financial advisor part 1
• Finding a financial advisor part 2
• Finding a financial advisor part 3

 

Does anyone use a fee-only advisor?  Any advice on how to find one?