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Everyone in the Same Box
The Canadian banks and brokerages have millions of clients, making it hard for them to know you well enough to serve your specific goals. Getting to know you and your specific family and financial situation takes many hours a year – time large banks cannot and will not easily allocate to each client. The brochures, the products, the fee schedules and the services are designed to treat thousands of clients exactly the same way, regardless of their circumstances.
Stock brokers are often grouped into “teams” with several advisors and their support staff working together for even greater efficiencies. This standardized approach coupled with putting clients into the same types of investment solutions (wrap programs or pre-designed model stock portfolios where everyone gets the same mix) allows brokers and broker teams to manage hundreds of millions of dollars of client money and oversee thousands of clients all at once at very low cost to the bank. That’s great for them, but can be lousy for you.
Canadians who “follow the crowd” may never know the difference, being victims of slick marketing campaigns and sales pitches that tout why this solution is “better.” I never understand how a “portfolio in a can” and limited communication for a high, hidden fee can be better for the client.
Fee Transparency and a Focus on Value
When you purchase apples at the supermarket, you can clearly see the price you pay for the pesticide free organic apples or the regular apples. In that moment of selecting the apples for your family, you decide on a value proposition that matches the cost of the apples you can afford with your concerns over food health. The key here is that you know all the factors and can make an educated decision.
It is flabbergasting that for something as important as your life savings, the industry often makes it impossible to complete the same value analysis. For mutual funds, they may not take the time to explain the hidden MER fees inside the mutual fund or tell you there are as many as five different commission options to purchase the funds – all with different pros and cons.
Or they may not disclose what commissions they earned when they sold you the bond, the GIC or the IPO product they recommended to you. And they may not tell you about the five different ways fees can be structured in an advisory relationship (hourly rate, flat fee, commissions, asset based fees, or a blended approach) allowing you to choose the fee method that best suits your preference for services and service. Often, they don’t talk about them because they don’t offer them.
Banks rarely present a transparent, educated fee approach that lets you make the same value decision that you make with apples. If you cannot judge value for the services that you get from your bank or your bank based broker, perhaps you need to move on, leaving the bank’s services behind and finding a professional advisor with a fresh approach.
Have you ever made a really large deposit to your bank account that triggered a call from the bank trying to upsell you to their in-house financial planner or to invest it into other products? There is rarely any discussion as to the purpose or proposed use of the money, just a conversation about how the bank can extract higher fees from your money.
I had a client who sold her house and received a few hundred thousand dollars which was deposited into her bank account. She told me the bank was ruthless and called her multiple times asking her to come into the branch. She said “It felt like someone was grabbing my arm, holding me and pulling me in.” She became so uncomfortable that she moved her money to a different institution so she would not have to be hassled anymore. Guess what happened at the new institution?
This humorous video was created by RetireHappyBlog to help people recognize that the financial industry is not always doing a great job at creating proper retirement plans. https://www.youtube.com/watch?v=jK_w38kDiKI
You might be asking yourself, “Where do I find the right Financial Consultant near me who charges a flat fee and will treat me fairly?” “Where can I find an advisor who can create an Integrated Aligned Overarching Strategy?” or “Where can I find an advisor who will only invest my money in proven passive investments? We suggest that you interview several. You’ll quickly learn that there are very few who are fiduciaries, believe in passive investing and have a process to create an Integrated Aligned Overarching Strategy. When you do find the right advisor, you’ll be able to relax in the knowledge that you are in the right hands and that your financial future is secure. Feel free to reach out to me with your questions. I’m committed to investor education.
Dean Kendall is a Financial Organizer in Calgary, handling all of the financial affairs for a select group of clients who value unbiased quality advice for one simple flat fee.
His book - Stop Paying Hidden Investment Fees! Click here for more information https://www.ideallifeexperience.com/Stop-Paying-Hidden-Investment-Fees
Newest book - Becoming The Champion of Your Dreams: How to Set and Achieve Your Most Important Goals Click here for more information. https://www.ideallifeexperience.com/Becoming-the-Champion-of-Your-Dreams
In addition, Dean is a 3X Canadian National # 1 Amateur, a 5X Canadian National #1 Professional BMX rider, downhill mountain biker and an avid snowboarder. He is an expert at winning. Let him show you how to win the money game. You can reach Dean at dean@ideal-life-experience.ca or Phone 403-543 -7226
©Copyright 2008 – 2022 by Dean Kendall. All rights reserved. 403-543-7226
dean@ideal-life-experience.ca