@resjudicata Good stuff. It is very liberating to have full control of your investments while minimizing your fees.
"The rise of ETFs is making life miserable for Canada’s mutual fund industry" - G&M
- Thread starter ukbeliever220485
- Start date
@ukbeliever220485 I believe changes in demographics and access to information is going to hurt the banking industry in general. Once mortgage brokers, online banking and ETF's are adopted mainstream, I find to hard to see how banks could continue to post record profits.
Having seen my relatives go to the bank to talk to a 'financial advisor' about their investment needs makes me die inside. There is no value a bank advisor provides that is significantly worth more than an ETF and you can accomplish this without paying 2-3%.
Having seen my relatives go to the bank to talk to a 'financial advisor' about their investment needs makes me die inside. There is no value a bank advisor provides that is significantly worth more than an ETF and you can accomplish this without paying 2-3%.
@kaiti Most older people or people who were never educated in finance just stick their life savings in HISAs or GICs. In this case a good bank advisor can actually help them earn more interest than 1-2% in those products and actually get a decent return.
Depending where you go, I’m sure most banks have some high dollar mutual funds where the fee is lower (e.g. invest over $50k and the MER drops to 0.4%). An ETF is still cheaper but an advisor who is able to get someone away from only HISA/GIC and into the market is valuable both to that client that is making more money and to the market as a whole by adding institutional ownership (therefore stability) to markets
Depending where you go, I’m sure most banks have some high dollar mutual funds where the fee is lower (e.g. invest over $50k and the MER drops to 0.4%). An ETF is still cheaper but an advisor who is able to get someone away from only HISA/GIC and into the market is valuable both to that client that is making more money and to the market as a whole by adding institutional ownership (therefore stability) to markets
@viri Ok, so how about the advisor does the best for the client and places them to in the ETF right from the beginning. The fiduciary BS banks push on their employees shouldn't just be limited to the bank. If any advisor notices that someone is not maximizing their investments, they should be open to all solutions.
@kaiti As is my understanding they can’t discuss it, but assuming you’re right there’s no point for them.
Nobody who works for any company would advertise for another company’s service. Should contractors start recommending other contractors that are cheaper? Should Safeway workers mention that wal mart is cheaper and will price match so don’t come here? Is a Best Buy employee going to tell you when something is cheaper on amazon? Will the cable companies just tell me to cancel and get Netflix?
Their job is to do a service and help improve the clients finances using their companies products and not another companies products. A key piece of mutual funds is that you’re getting the in person advice and planning, where if this person didn’t exist a customer might keep everything in HISA or go all-in on a Nasdaq etf because they have no idea what to do.
Not to mention that any advisor that advocated for ETFs would just be fired and replaced with someone who actually does work for the company.
The only way to fix this is continuous education like what questrade is doing with their commercials. And in the mean time if someone doesn’t know their options and needs help or someone prefers to meet with a person over listening to the internet they can go to the bank.
I don’t own any mutual funds myself but I can certainly see their place in the banking system.
Nobody who works for any company would advertise for another company’s service. Should contractors start recommending other contractors that are cheaper? Should Safeway workers mention that wal mart is cheaper and will price match so don’t come here? Is a Best Buy employee going to tell you when something is cheaper on amazon? Will the cable companies just tell me to cancel and get Netflix?
Their job is to do a service and help improve the clients finances using their companies products and not another companies products. A key piece of mutual funds is that you’re getting the in person advice and planning, where if this person didn’t exist a customer might keep everything in HISA or go all-in on a Nasdaq etf because they have no idea what to do.
Not to mention that any advisor that advocated for ETFs would just be fired and replaced with someone who actually does work for the company.
The only way to fix this is continuous education like what questrade is doing with their commercials. And in the mean time if someone doesn’t know their options and needs help or someone prefers to meet with a person over listening to the internet they can go to the bank.
I don’t own any mutual funds myself but I can certainly see their place in the banking system.
awomannameddamaris
New member
@cedar2326 This is what they want us to believe. So that regular Joe's have the PRIVILEGE of banking with them.
@awomannameddamaris It's sad to see that all the perks most Canadian banks offer to their HNW, UHNW and commercial clients are on the backs on retail banking channels. The huge bonuses paid to top management is on the back on retail banking.
Meanwhile you get charged to access your card after 7 pm /s
new feature coming
Meanwhile you get charged to access your card after 7 pm /s
new feature coming
resjudicata
New member
@awomannameddamaris Bank advisors often don't get paid on accounts under 200-300k. Client still gets charged though.
@cedar2326 Ordinary joes make up 64% of the Big 5's profits. They need the average Joe to cover their operating costs and provide those benefits to higher net worth clients.
Here's a break down of the big 5 profits.
Retail banking (including small business) - 63%
Commercial and Enterprise - 16%
Gain/loss from investing activities - 12%
Private banking (this supposed high net worth clients) - 3%
The rest is miscellaneous.
Point being, most Canadian banks are not asset management firms like in the States and are heavily dependent on retail banking channels.
Here's a break down of the big 5 profits.
Retail banking (including small business) - 63%
Commercial and Enterprise - 16%
Gain/loss from investing activities - 12%
Private banking (this supposed high net worth clients) - 3%
The rest is miscellaneous.
Point being, most Canadian banks are not asset management firms like in the States and are heavily dependent on retail banking channels.
absolutezero
New member
@absolutezero Read any banks annual report summary and they highlight how much each channel contributes to the bottom line and the growth/drop in each segment.
resjudicata
New member
@ukbeliever220485 It's frustrating trying to convince my dad that his mutual funds have made lots of money.....for his bank
ukbeliever220485
New member
@resjudicata Which MFs? Perhaps getting him to eSeries would be a decent middle-ground?
Of course, if the returns he's getting are 'satisfactory' for his needs, perhaps just let things be?
Of course, if the returns he's getting are 'satisfactory' for his needs, perhaps just let things be?
resjudicata
New member
@ukbeliever220485 I'm not sure, royal bank stuff from the late nineties. Very small investment, and he's out of it now, he has a bit of Canadian banks and telcoms, and lots of real estate now.
@ukbeliever220485 How companies like Freedom 55 are still in business I'll never know.