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Final Meeting With My Finacial Advisor.
Old 01-09-2007, 08:46 AM   #1
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Final Meeting With My Finacial Advisor.

I have been with IG for approximately 10 years, 8 years with my present advisor. When I first met with IG 10 years ago, I made it clear that I wanted to retire early and all I wanted to know at that point in time is how much do I need to give IG in order to retire at 50. I made it my mission to give them at least that amount and up to 50% more without fail every single year. After about the 3rd year, I realized that there was a serious problem in that the returns they had listed in there so colorful charts and graphs were no where near what I was actually getting. Year after year, I voiced my disappointment, finally after 6 years I told them that I was no longer going to give them any more money and they was on probation for lack of a better word. His response was that he managed us and IG invested our money, well this totally confused me. It seemed that every meeting we had (which lasted at least 2 to 3 hours) was a total waste of everyone’s time, he never readjusted the funds or made any changes. We finally told him that our rate of return was the determining factor as to whether we were going to stay. When ever the market went down which usually seemed the case we always got the same speech, “now is the time to invest" in which we always did, but never saw the positive result we had hoped for.
We never really had anything to compare IG's returns with since we kept our entire portfolio with them. One day it so happens that our neighbor got wind or our disappointment while over for a drink and told us that we could easily get at least 5 % more than we were presently, so we thought, hey what do we have to loose. Well 4 years later, on his advice he was right. Keep in mind that our neighbor is not a financial advisor, but was able to retire at 50 on a single income with 4 kids spoke for itself. When we finally decided to tell our advisor that we no longer needed IG's services, he requested the we meet with him one last time which is the reason for this post.

The meeting.....my DW and I met with him for 1 1/2 hour and this meeting was about how he could improve to help him be a better advisor. I started off by saying the when he told us that he managed us, we simply didn't need to be managed, we knew exactly what we wanted, how we were going to get there and how much we had to come up with to accomplish that goal. All we asked of IG was the best possible return possible. In the 6 years that we invested with IG we were no were near our projected goal and virtually most of our portfolio was principal. We were averaging 1% return every year. Many times during the conversation he interrupted me and made excuses that he felt IG was giving us a good return and that he was trying to find other ways to get us to come up with more money to invest such as mortgage our house with was already paid. Take out another loan and all this was tax deductible. I started to get upset and raised my voice to say “we gave you 50% more savings that you had requested and we still were no were near what your charts were saying because we only got a 1% return as apposed to the 8 to 10% you had projected”. “Please tell me how a neighbor can advise us and get at least 5 to 7 % better return consistently over a 4 year period and he's not a professional in this field”. Although at that point I didn’t chose my words wisely his reply was simply that he was lucky and that one day he could loose everything, but if we'd like, tell us what those mutual funds are and if he could find the same funds with IG would we invest with him. We were shocked to say the least, responding “why.........we did all the research, and now you want us to lock in those funds for 7 years and pay a lot more fees than we can on our own. No!”

In conclusion, I made it clear that when we first met, I didn't have time for 6 meetings at year, 2 would suffice, and that what I wanted from IG, was the best rate I could get in order to retire in 10 years, and they didn't even come close. I didn't want to be managed I simply wanted them to “show me the money”. I know bad choice of words. Well we finally ended the meeting shaking hand and leaving on a fairly good note, if that's possible, with me thinking he never heard what I was trying to say, but then I thought, was I guilty of the same thing?

One thing that I did find surprising is although we had told him from day one not to pitch us on life insurance; he brought up that topic 6 times during this meeting and told us we should seriously consider it.

Forgive me for not cleaning up the typos, grammar and composition; I had a rough night that meeting left me restless and needless to say, I didn’t sleep much.
Oh and I apologize for the tone in my post.
I have a lot of respect for Financial Advisors; I just felt I should have chosen more carefully 10 and 8 years ago. I am curious though, is there something I could have done or did and therefore should accept some responsibility?

Thanks
MD
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 08:58 AM   #2
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by My Dream
I am curious though, is there something I could have done or did and therefore should accept some responsibility?

Thanks
MD
I think that is beside the point. The important thing is that you did take action and are now out of IG's clutches. Concentrate your efforts o what to do with the money now, not on assigning blame.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 09:12 AM   #3
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Re: Final Meeting With My Finacial Advisor.

brewer12345, the reason I asked is because I'm having a difficult time understanding this whole investment strategy and I don't think or should rely on my nieghbor to give me financial advice for the rest of my life. If I can't get a handle on doing my own investing then I may have to go the route of an advisor again. I know it's a slow learning process, but it's a lot slower than I had anticipated.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 09:20 AM   #4
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by My Dream
brewer12345, the reason I asked is because I'm having a difficult time understanding this whole investment strategy and I don't think or should rely on my nieghbor to give me finantial advice for the rest of my life. If I can't get a handle on doing my own investing then I may have to go the route of an advisor again. I know it's a slow learning process, but it's a lot slower than I had anticipated.
Hmmm, what books have you read on the subject?
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 09:30 AM   #5
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by My Dream
brewer12345, the reason I asked is because I'm having a difficult time understanding this whole investment strategy and I don't think or should rely on my nieghbor to give me finantial advice for the rest of my life. If I can't get a handle on doing my own investing then I may have to go the route of an advisor again. I know it's a slow learning process, but it's a lot slower than I had anticipated.
There's a ton of info out there to get started: Four Pillars, Your Money or Your Life, Automatic Millionaire, and on and on. Go to Amazon.com and look around. A really good start would be to go on Vanguard or Fidelity's website and poke around, lots of info there.

You sound a little frantic, take a deep breath, read a little, and you'll be fine.............
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 09:42 AM   #6
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Re: Final Meeting With My Finacial Advisor.

Don't beat yourself up. You are doing the right thing. 1% is far too low, even lower than CDs (at least in the US).

At least you are doing something about it now. Go out and read a lot. There are definitely some interesting financial discussions here. I second the Vanguard and Fidelity sites. If you still aren't comfortable I would recommend looking into the S&P500.

Remember that a financial advisor is really just a salesperson and doesn't know that much more than you. What he or she does know is the pitchs (like life insurance). They also know about how to charge you fees.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 09:56 AM   #7
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by brewer12345
Hmmm, what books have you read on the subject?
1. The Wealthy Barber
2. Stop Working - Here's How You Can, Derek Foster
3. Rich is a state of mind: Robert Gignac, Michael Townshend

The 3rd book I can't get into and I don't think I'll complete it since it seems like a life story and I'm losing interest far to soon.


Quote:
Originally Posted by FinanceDude
There's a ton of info out there to get started: Four Pillars, Your Money or Your Life, Automatic Millionaire, and on and on. Go to Amazon.com and look around. A really good start would be to go on Vanguard or Fidelity's website and poke around, lots of info there.

You sound a little frantic, take a deep breath, read a little, and you'll be fine.............
I think I'm going to try one of those books insted FinanceDude, hopefully it will kick start me into thinking I can grasp the concept better. As for a little frantic, that I will have to agree and I do hope in time that I wil get it.
Quote:
Originally Posted by bssc
Don't beat yourself up. You are doing the right thing. 1% is far too low, even lower than CDs (at least in the US).

At least you are doing something about it now. Go out and read a lot. There are definitely some interesting financial discussions here. I second the Vanguard and Fidelity sites. If you still aren't comfortable I would recommend looking into the S&P500.

Remember that a financial advisor is really just a salesperson and doesn't know that much more than you. What he or she does know is the pitchs (like life insurance). They also know about how to charge you fees.

Not sure if living in Canada makes a difference in those suggestions.

Thanks everyone.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:06 AM   #8
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by My Dream

I have a lot of respect for Financial Advisors
MD, this is your mistake (which you have now corrected). A Financial advisor is in business to make money (maybe to feed a family, maybe justy to get rich quick). Even if he made the best investment decisions for you, he is still taking a cut from your returns. As Finance Dude has pointed out there are huge temptations for all Finance Advisors to take you to the cleaners. Why do you think your guy was still trying to sell stuff to you at the bitter end?

Educate yourself and look after your own future. The guys on this board can, and will, help you but you must take control.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:07 AM   #9
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Re: Final Meeting With My Finacial Advisor.

My wife has her RRSP with IG.

They have only managed funds and their expense ratios are in the 2-3% range. Canadian ERs are high anyway, and IG is as high as any of them. She's been with them for 10 years. I've kept my mitts off even though it is about 25% of our total portfolio and for some reason she had loyalty to them. About 6 months ago I finally convinced her that we need to move it out of there. Well do that next winter when I am back in Canada permanently and have time to deal with it. Trying to deal with it from northwest Alaska is not my idea of fun.

Over the past 10 years, IG has mostly talked. They haven't done squat for her. It's taken me some time to convince my wife we can do better. I've been in no hurry to have her change while I'm tied up in a 70 hr/week job anyway.

In 2006, we made over 15% on the part of the protfolio I managed. IG got 4.7%. And that is fully invested.

There are far better places in Canada for investments, IMO. Have you checked the Canadian webring, or Shakespeare's primer? If you need those links, pm me.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:09 AM   #10
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Re: Final Meeting With My Finacial Advisor.

If you can't figure out a lot about investing, see if you can find a canadian version of Vanguard's Target Retirement series of mutual funds or their Lifestrategy series of mutual funds. You pick how risky you want your total investment portfolio and buy that fund. Moderately aggressive - buy the Moderate fund. Conservative - buy the Conservative fund. Put all/most of your money in that. It will probably beat a majority of any high-fee advisors you could find.

I have no idea what canadian funds are available to you. We have a few canadian investors here that may have some ideas.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:13 AM   #11
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Re: Final Meeting With My Finacial Advisor.

Quote:
We were averaging 1% return every year.
This is CRIMINAL .... those clowns should be locked up.

Here, I'll save you a bunch of reading - and headaches:

Dollar cost average into no load index funds.

There, all done.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:19 AM   #12
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Re: Final Meeting With My Finacial Advisor.

While I never had a FP only because I was too young and broke , some years ago a I susbcribed to a news letter on how to invest my money . I also read a lot of magazines.

However, about 5 years or so, I became a believer in indexing and assest allocation and wouldn't dream of subscribng to any newsletter. Our portfolio is larger than it has ever been and we pay almost nothing for advice. While it feels a bit lazy, today indexing is even easier than a decade ago.

You will have to find the approach that works for you, but if you were to do nothing more that pick the Vanguard target retirement fund that matches you goals and risk, IMHO, you would come out way ahead of working with any FP.

Investing is not difficult. FP's are just sales people with no more knowledge that you have.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:20 AM   #13
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by bssc
Remember that a financial advisor is really just a salesperson and doesn't know that much more than you. What he or she does know is the pitchs (like life insurance). They also know about how to charge you fees.
You are funny...............
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:21 AM   #14
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Re: Final Meeting With My Finacial Advisor.

and I forgot .. you won't have to go to ANY meetings!!
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:22 AM   #15
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Re: Final Meeting With My Finacial Advisor.

A good book for the beginner is "Financial Planning for the Utterly Confused "by Joel Lerner .It explains everything in simple terms.
I also agree with the Vanguard advice.Their lifestyle funds are so easy even a caveman could do it .
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:23 AM   #16
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by F M All
...A Financial advisor is in business to make money (maybe to feed a family, maybe justy to get rich quick). Even if he made the best investment decisions for you, he is still taking a cut from your returns...
Isn't everyone in business to make money?

If someone makes the best investment decision for me, I wouldn't mind paying him for that.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:32 AM   #17
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Re: Final Meeting With My Finacial Advisor.

A moving story. Sad, but useful insight into how it can go bad. It illustrates what my son and I were talking about the other day, no matter how bad your broker may/may not feel when you lose money, he is still pocketing the commission and going home to his family.

Quote:
Originally Posted by My Dream
I am curious though, is there something I could have done or did and therefore should accept some responsibility?
I agree with Brewer. It's a good thing that you snatched what money you had left out of the hands of those guys at IG. Now, after you've paid the price for the lesson, it's time to understand exactly what was being taught. I like this quote that I found the other day:
Quote:
"The investor's need to believe somebody is matched by the financial advisor's need to make a nice living. If one of them has to be disappointed, it's bound to be the former."
You walked into a business that makes money by selling you investment products. They spend a great deal of time, money and effort in creating an image that makes you feel comfortable in putting your money in their hands. If you don't understand the product you are susceptible to being ripped off. Not that they're all thieves and con men (although many are) it's because they are salesmen and ultimately all you are is a customer who needs to be seperated from his money so that the seller can get paid.

It's not that selling is a bad thing - or that salespeople are evil and filled with greed. But it is a fact that customers who are ignorant of what they're buying are easy marks for the ethically challenged. It's like buying a car - if you show up with your checkbook in hand completely unprepared to negotiate with some knowledge and research - they will let you drive off the lot minus the full price for a car that didn't suit your needs. But if you are an informed consumer who shows up having a good idea what you need and what is a reasonable price to pay for it, you can make a decent deal and have a good buying experience.

Most of us here have made our share of mistakes, and you're certainly not the first one to take the ride that IG took you on. But at some point all of us looked in the mirror and realized the person looking back at us is the one who is ultimately responsible for our financial welfare. And that person has to know, at the very least, the basics of how investment products work, how they should perform, if they're right for your situation, and a reasonable price to pay for them.

Invest in yourself and your future and spend some time educating yourself on the basics. You don't have to become a certified financial planner, but you have to be able to make informed decisions about what you're buying.

Good luck
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:32 AM   #18
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by retire@40
Isn't everyone in business to make money?

If someone makes the best investment decision for me, I wouldn't mind paying him for that.
Well, if everyone would take personal responsibility AND accountability for making sure they have a great retirement, there would be no need for advisors.............case closed............

That being said, I am continually AMAZED at the lack of even simple practical knowledge out there................... My job is more educating than investing, has been since I started..........
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:33 AM   #19
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by F M All
MD, this is your mistake (which you have now corrected). A Financial advisor is in business to make money (maybe to feed a family, maybe justy to get rich quick). Even if he made the best investment decisions for you, he is still taking a cut from your returns.
Wow, amazing! Your doctor, attorney, plumber, electrician, gardener, and accountant all work for free and are in their businesses only for service to mankind!

You certainly know some generous people.

also, I can't think of a worse field (ok, medicine) to get into to get rich quick.
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Re: Final Meeting With My Finacial Advisor.
Old 01-09-2007, 10:38 AM   #20
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Re: Final Meeting With My Finacial Advisor.

Quote:
Originally Posted by retire@40
Isn't everyone in business to make money?

If someone makes the best investment decision for me, I wouldn't mind paying him for that.
If he only took a percentage of the added return he gave you then it might be justified. These sharks want a cut of your total investment.
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