Advocis: Advisors can help stop the ban on embedded fees

Advocis: Advisors can help stop the ban on embedded fees

3 Comments
  • Kathy 2017-03-13 10:29:08 AM
    When Advocis ask this question do they ask " would you rather write me a cheque or have it come off your investments"
    When they say people prefer embedded commssions / fees are they saying people would rather they have them deducted from their accounts or that they dont want to know.
    I would like to see the questions asked . Bear in mind they are asking people who only know that system .
    Is it implied i wont be able to help you as you have such a small account?
    Most fee based or flat fee using F class or ETF still take the fee off the investment account , its just a preagreed amount per month .
    It gives the clsint some power, they can argue they dont feel they got value for money. Advisors must add value, justify cost.
    I dont understand why clients would object to that.
    We all hate being gouged at car dealers etc with hidden add ons , i cant imagine people would not vote for transparency .
    Maybe if advisors did all the financial planning and cash flow they purport to some of these people would have bigger accounts!
    Post a reply
  • Mike Travers, CFP 2017-03-13 11:37:36 PM
    I agree with you Kathy, I would think Canadians prefer to know all the costs that go into the final price at the car dealership and don't want to be gouged through hidden fees that aren't disclosed. CRM2 has done a good thing for outlining what a client pays to the dealer/advisor and provides a means to determine value.

    But why not wait to see how effective CRM2 has been in getting Canadians to consider fees? From my perspective, the CSA's drive to eliminate embedded fees feels like a disservice to clients on the whole. Back to the car dealership, but at the service department, it's like telling a car owner she can't pay for the tune up with a Mastercard and only debit is acceptable because it's unclear she will properly manage her debt through the use of a credit card.

    Put the summary of investment fees on the first page and highlight the heck out of it but don't take away investors' choices for paying for product/service on the notion they're not being mindful enough of fees or worse, their advisor is ripping them off!
    Post a reply
  • Kathy 2017-03-18 2:42:34 PM
    Good points Mike, provide information , let people make a choice. Its a concern that the advisors that serve smaller accounts may give up. I lived through this in England. There were thousands of advisors at Prudential . Liverpool Victoria, Pearl Assurance, the branch advisor at the bank and now mostly gone. Group RSPs are generally insufficient to provide for a comfortable retirement , home prices have rocketed so its easy to save less, parents are cannabalising their own savings to help kids out , who have in turn have less secure jobs than the boomers and student debt . If the state doesnt want to care for us all in our old age then we need to help people plan.
    As well as fees I would like to see clearer reporting of returns, compared to a benchmark. Its no help knowing how much you paid if you cant tell whether you got good value
    Post a reply