I decided to do my own investing

My Dream

My Dream

Full time employment: Posting here.
Joined
Sep 29, 2006
Messages
837
Location
Ontario, Canada
I have approximately 60% with Investors Group, been with them for approximately 9.5 years and have earned an average of about 2% per year. I think it's safe to say that I decided to take the whole amount out, but I'm not surprised that they are resisting, and the fees to remove the funds are ridiculous.
Another 27% with TD Waterhouse in Mutual funds, another 10% in stocks and 3% in cash.

I'm not sure right now what I'm going to do, but I need to try and educate myself, for now I need to find a way that I can eliminate a couple of thousand in fees to remove those funds with IG. But I think I have no choice but to bite the bullet and pay up. This sucks that investment companies earn more off of you're money then we do.

This is all new to me.

I'll keep you posted.
 
My Dream said:
This sucks that investment companies earn more off of you're money then we do.
Click to expand...

Caviat Emptor - NOUN: The axiom or principle in commerce that the buyer alone is responsible for assessing the quality of a purchase before buying.
 
I just bailed out of an annuity and had to pay a 5% penalty for getting out early. The investment choices in the annuity were very limited and had a 2.2% expense ratio.

Moved it to my IRA account where the expense ration was about .3%. On $100K, the difference in expenses alone made the early bail out a break even deal after about 3 years even if performance is identical.

Not sure what kind of investments you are in that require that much to get out, but do the arithmetic. At 2% return for 9 years, sounds like you'll make up your back load fees within a few years.
 
Hey Rich,

I'll bet you feel better though. You did the right thing.
 
This is a response I got from IG,"This fund series has atttached with it a fund schedule of redemption fees that started at 3.5% and then went down each year at the rate of 05.% so that by 6 years you would have no redemption fees. The new schedule that we adopted a few years ago, has a different rate system."

In other words, if you invest $100,000.00 with them, they take 3.5% off so you only have 96,500 principal to invest. Every year they give you back .5%. They are making money off of you're money. That's just one of the fees.
 
My Dream said:
This is a response I got from IG,"This fund series has atttached with it a fund schedule of redemption fees that started at 3.5% and then went down each year at the rate of 05.% so that by 6 years you would have no redemption fees. The new schedule that we adopted a few years ago, has a different rate system."

In other words, if you invest $100,000.00 with them, they take 3.5% off so you only have 96,500 principal to invest. Every year they give you back .5%. They are making money off of you're money. That's just one of the fees.
Click to expand...

Well, live and learn. That's why many here use Vanguard, T. Rowe Price, Fidelity, etc.

It's really just an arithmetic problem. If their performance gap or expense ratio are greater than .5% a year worse than wherever you choose to move the money to, then I'd move it and you'll break even in a short time, winning thereafter.

Consider it cheap tuition for your budding financial education ;).
 
I feel your pain. I've got an account with an investment group that has to be moved. Additionally my wife and I have seperate 401k plans and retirement cash balances that we will take and are trying to formulate plans on how to make that happen and what to do with them. I'll start another thread seeking advise on how to do this.

I'm sorta in the same boat with you here, guess we have to pay for our previous mistakes. But hey, life is a learning experience.
 
I think I'd threaten to expose them with their big 2% return if they tried to charge me enormous fees to get out. How ridiculous.
 
Hmmm (1966 - 2006) to celebrate my 'incredibly brilliant 40 yrs' of doing my own investing I consolidated even more of holdings into Target Retirement 2015 in 2006 (from Lifestrategy, REIT Index, Small Cap Value).

heh heh heh heh heh heh heh heh heh heh - still have 15% in my never say die, hope springs eternal, it only takes one - one day I 'WILL' beat those boring low cost balanced index funds - possibly before age 99.

Psst - not Wellesley but 0.21% expense ratio according to VG.- - .25% for the Prime MM being the most expensive.
 
Rich_in_Tampa

That's why many here use Vanguard, T. Rowe Price, Fidelity, etc.

In Canada, we don't have those institutions.

poboy

I am sure others have different fund companies they might suggest but you might explore this site as a start.

Thanks for the link, but in Canada, I don't believe that will help.

virginia

I think I'd threaten to expose them with their big 2% return if they tried to charge me enormous fees to get out.

They are one of the largest investment companies in Canada, they simply don't care, they're only interest at this point is not losing me as a customer.

unclemick2

Hmmm (1966 - 2006) to celebrate my 'incredibly brilliant 40 yrs' of doing my own investing I consolidated even more of holdings into Target Retirement 2015 in 2006 (from Lifestrategy, REIT Index, Small Cap Value).

heh heh heh heh heh heh heh heh heh heh - still have 15% in my never say die, hope springs eternal, it only takes one - one day I 'WILL' beat those boring low cost balanced index funds - possibly before age 99.

Psst - not Wellesley but 0.21% expense ratio according to VG.- - .25% for the Prime MM being the most expensive.

unclemick2 congrats, unfortunatly for me.........that went way over my head.
 
My Dream said:
This is a response I got from IG,"This fund series has atttached with it a fund schedule of redemption fees that started at 3.5% and then went down each year at the rate of 05.% so that by 6 years you would have no redemption fees. The new schedule that we adopted a few years ago, has a different rate system."

In other words, if you invest $100,000.00 with them, they take 3.5% off so you only have 96,500 principal to invest. Every year they give you back .5%. They are making money off of you're money. That's just one of the fees.
Click to expand...

That is not quite true. What you got yourself into was back end loaded mutual funds (DSC funds) that have a declining redemption schedule. They take nothing from you when you invest. Only when you decide to cash in your investments and the fee depends on where you are in the redemption schedule. It would be 3.5% in the first year, but 0% by the 7th year should you have held your investments that long.

Most brokers in Canada inappropriately put their clients into these funds by default without first asking the client. And often because the client does not want to pay a front-end load and doesn't know to ask for no-load or low-load funds. IG has done nothing no other full service broker (shark) would not do. Caveat emptor - buyer beware. All investment companies (other than discount brokers) have similar schedules when you cash in the funds.

Why have you not checked with your 'new' discount broker about doing a straight across transfer of your IG assets? Unless you have specialized products that are only sold by IG advisors, all mutual funds are transferable in kind. Simply ask your new broker to initiate a transfer. You will still be obligated to pay the redemption schedule should you wish to cash these assets in for something better at some point in time, but at least the option and choice of timing will be your own.

I recommend you read up on the following thread at Financial Webring Forum http://financialwebring.com/forum/viewtopic.php?t=101652 and in particular the Investing and Implementation sections to get some perspective on DIY investing. Your posts appear to contain whining and not much in the form of 'roll up your sleeves' effort to educate yourself on options available to cut your costs dramatically and put your investing decisions in your own hands.

Example: You can buy and sell FE mutual funds at E*Trade Canada at zero cost provided you do not sell within 90 days.

Edited for grammar...
 
AltaRed said:
Why have you not checked with your 'new' discount broker about doing a straight across transfer of your IG assets?
... Your posts so far appear to contain a lot of whining and not much in the form of 'roll up your sleeves' effort to educate yourself on options available to cut your costs dramatically and put your investing decisions in your own hands.
Click to expand...

I know we have some other apparently successful, non-whiney, non-defeatist Canadian friends like AltaRed here on the board -- maybe they can chime in to verify or dispel the implication that there are no low-cost investment opportunities available to Canadians. I find that hard to believe but don't know enough about it to say much more.

My Dream, the idea is not to shoot down as unsuitable every suggestion people offer you, but to use them as examples of the types of things you might explore within the financial world that's available to you. I guess I'm just not resonating with the tone of this thread.

Good luck to you.
 
What, Canadians can't put money in Vanguard??
 
TromboneAl said:
What, Canadians can't put money in Vanguard??
Click to expand...

They can, but only via ETFs. Resident Canadians are not permitted to buy US domiciled mutual funds per US law. And so while Canadian domiciled mutual funds and ETFs are expensive relative to their US counterparts, a resident Canadian can buy anything that is traded on a US stock exchange. I, for example, own SPY ETF units at, I believe, 0.10%

And while I am at it, I apologize to My Dream for my "whining" comment. It was a reaction to my partial reading of a thread My Dream started elsewhere on his work/life issues and was uncalled for in this thread. I was reacting to the poster's comments about IG ripping him off.
 
LOL!

Are you able to use ETFs bought through your TDWaterhouse brokerage account

Thanks for the link LOL!, I'm going to read it when I have a chance, but first I need to get educated on these terms, such as ETFs. It'll take some time, but I'll get it. And thanks, luck is what I need right now, along with educating myself.

AltaRed

Why have you not checked with your 'new' discount broker about doing a straight across transfer of your IG assets?

Very good advice Alta, and I have, this is a direct quote from TD "$45 per fund charge is a TD charge, as redeeming Investors Group funds is a manual process for TD." This would amount to around $1,600.00, as it stands now, I've stated that I don't want to pay that and await there response.

I recommend you read up on the following thread at Financial Webring Forum http://financialwebring.com/forum/viewtopic.php?t=101652

Thanks for the link.

Your posts appear to contain whining and not much in the form of 'roll up your sleeves' effort to educate yourself

I've heard that from a few members, and by the sounds of it, if I don't shape up I may have overstayed my welcome. I need to pull up my socks and get out of this depression I'm going through. No excuses, I need to let go of the past and look forward, but it's really dam hard.

I was reacting to the poster's comments about IG ripping him off.

I went through the 22 posts trying to find my statement saying "IG was ripping me off" but couldn't find it. Maybe that was the impression I gave you, either way what ever I say was obviously my opinion. As I truly believe we're all entitled to, although I don't think that really matters anymore, I got you're point.


Rich_in_Tampa

My Dream, the idea is not to shoot down as unsuitable every suggestion people offer you, but to use them as examples of the types of things you might explore within the financial world that's available to you.

That wasn't my intent, and for that I apologize.


In conclusion, you've all given me very valuable info, which I will read, and it the mean time, I'm going to be moving our funds from IG since they're fees are just too high. Meanwhile, in reading between the lines, I'm going to get my chit together and take some time away from this forum to reflect.


The information available in this forum is endless. Thanks so much everyone.
 
MyDream.. don't run off just because someone was impolitic; I don't think any one person speaks for "the forum". There's nothing to read between the lines except what you took away from one or two posts out of many others. Hey, people here can be know-it-alls.. cantankerous.. holding ourselves to be some of the best and brightest because "we get it".

AltaRed apologized, and I think you can take some of his advice exchanging the words "why did you not?.." for "why don't you...?" (I know nothing about Canadian investment so I can't comment on particulars.) It's not easy for someone who has devoted themselves to their business to turn financial whiz overnight; many people here now devote themselves to nothing else, so take it with a grain of salt.

It must be very hard (especially for a man, especially for "the breadwinner") to be questioning "what the heck am I doing?" You are looking at a huge shift in providing for your family via the sweat of your brow, versus providing for them through investments, and I can understand how that might be scary. You're not alone in finding that you have investments with overlooked strings attached that you have to disentangle.

You're also not alone in that UncleMick's posts go over your head! (But I enjoy them to the extent that he obviously enjoys them so fully himself..! Go U.M.!)

MyDream.. your posts really touched me. I, too, had a service business (not as stressful as yours - not so much liability) where I walked away with my portion of the accounts receivable and little else (my choice). I know you must worry about your kids, but try to eliminate the "wedding" aspect.. the wedding is about the two people involved and not how much $$ you throw at it. I think there's generally a reverse correlation between wedding cost and length of marriage, and there are any number of resources to help you and your kids pull off an event that is meaningful without breaking the bank.

I really like the idea of branching out into residential kitchens that some other posters proposed, if you choose to keep working in some way.. No one's going to dock you $1,000,000 for one thing, which should cut way down on your stress! I wish you were in Italy; I'd look into hiring you to re-do my kitchen.. (whaddaya think of a wood-burning pizza oven, a Lacanche stove..? some issues with re-building the chimney zone, of course.. there's an open fireplace now that doesn't draw... :D ::) ;))

You say you need luck. Most people here would probably say "you make your own luck." I think, along with others, you need to find a way to take a breather and recoup some energy. None of your questions seem silly (and I have seen silly questions posted here). You ARE on the right track! Take a deep breath and keep learning. You are "lucky" in that your wife is basically on board. Many people struggle or have struggled with a spouse who doesn't get it in any way, shape, or form; your conversation with her sounds a thousand times better than other similar "little chats" documented here.. she says openly that your unhappiness makes her unhappy.. so.. cut loose! (Her 'not touching the principal' argument could be re-visited, depending on what you both want to leave for your kids.. a pile of money or a dad who has crashed and burnt. Use the FireCalc and see if there isn't a "third way": 1/2 for you guys, 1/2 for them.. seems fair to me. :) )

I wish you all the best, and I hope you will keep us posted on how you are doing!
 
AltaRed said:
They can, but only via ETFs. Resident Canadians are not permitted to buy US domiciled mutual funds per US law. And so while Canadian domiciled mutual funds and ETFs are expensive relative to their US counterparts, a resident Canadian can buy anything that is traded on a US stock exchange. I, for example, own SPY ETF units at, I believe, 0.10%

And while I am at it, I apologize to My Dream for my "whining" comment. It was a reaction to my partial reading of a thread My Dream started elsewhere on his work/life issues and was uncalled for in this thread. I was reacting to the poster's comments about IG ripping him off.
Click to expand...

That sucks, but at least you can get the ETF's...................

SO there are options..........:) As far as Canadien brokers putting people in B shares, don't they have to disclose that? In the US, they do...........
 
FinanceDude said:
SO there are options..........:) As far as Canadien brokers putting people in B shares, don't they have to disclose that? In the US, they do...........
Click to expand...

Unfortunately, the Canadian gummint has seen fit that their citizens should be screwed, blue'd and tattoo'd by Canadian financial institutions. The profitability of the few remaining Canadian banks and life insurers is the envy of their US counterparts.
 
If MyDream can't buy US mutual funds, is there anything preventing him from "rolling his own" from a range of high-quality, dividend-paying stocks (US/Canadian/foreign) along with whatever fixed income type and %age works fom him? He's looking for 6%, and right now some US blue chips are yielding 4+% in dividends alone.

If he's attracted by a certain style of fund, from what I can see they all disclose their top holdings, so they wouldn't be terribly hard to roughly mirror if he didn't feel like flying solo. ANyway, from what we all have seen/read, there are worse things than being shut out of US mutual funds, 3/4 of which fail to even keep pace with the market here, given their expenses..
 
ladelfina said:
If MyDream can't buy US mutual funds, is there anything preventing him from "rolling his own" from a range of high-quality, dividend-paying stocks (US/Canadian/foreign) along with whatever fixed income type and %age works fom him? He's looking for 6%, and right now some US blue chips are yielding 4+% in dividends alone.
Click to expand...

He doesn't even have to do that. As I understand it, Canadians can buy ETFs on US exchanges with a discount brokerage account. Given the proliferation of ETFs (leaving aside CEFs), he could choose from just about any conceivable asset class and many variation on each theme, all at low, low prices.
 
Absolutely correct. The entire universe of US domiciled ETFs are available to Canadians via their Canadian based broker (full service and discount). Nothing stops Canadians from buying anything available off US exchanges, e.g. NASDAQ, American, NYSE. I own SPY, am also looking at SDY, DVY, VTV. VTI, EFA, etc, etc. We really don't need to access US domiciled mutual funds (although it would sure be nice to access the Vanguard ones).

The only thing Canadians have to recognize is the exposure due to currency fluctuations. The 90's were great when the C$ slid relative to the US$ - made US investments highly profitable. The last 4 years were just the opposite - US$ lost ~40% against C$. Having said that, exchange rate differences have stabilized and not likely to move much in foreseeable future.

Canadians also have a choice of fairly cheap index funds, especially eFunds via TD Waterhouse in Canada. They beat most everyone else on fees. Canadians also have a choice of Barclay's Canada iShares that also have an XSP (emulates S&P500) and XIN (emulates MSCI EAFE) sold in C$ that includes currency hedging. So if a Canadian doesn't want the US$ or Euro currency exposure, those are 2 options (at MERs that are slightly higher than the US$ equivalents in the USA).
 
FinanceDude said:
That sucks, but at least you can get the ETF's...................

SO there are options..........:) As far as Canadien brokers putting people in B shares, don't they have to disclose that? In the US, they do...........
Click to expand...

If you mean non-voting class of equities, I really don't know if Canadian brokers have to disclose that. You would need to ask them. However, since I think you plan on making all your own investment decisions via a discount broker, you can identity that for yourself.

FWIW, I have never owned B (non-voting) shares out of principle. I don't like being a second class shareholder and I don't like nepotism.
 
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