Author Topic: Dad in Canada has high fee investments - wants to switch to index  (Read 1201 times)

PoutineLover

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Hi, I'm looking for some advice for my father. He recently realized that his management fees were almost the same as his monthly contribution, so he is not earning much on his investments. I told him about index funds and he is interested in making the switch, but I am not an expert and I was hoping someone here could tell me if that is a good idea. What about dividends or ETF? He lives in Canada, has about $180,000 I think, I'm pretty sure it's mostly in an RRSP and maybe some of it is in taxable accounts. He's banking with CIBC, I don't know if they have any good low fee funds, or if he should switch to another bank or to Vanguard. The other thing is, he is about 15 years from retirement age, and I don't want him to put this in something where he loses a lot of money and doesn't have time to wait it out. Any thoughts are much appreciated, I'll try to add details if more are needed. Thanks Mustachians!

okits

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Re: Dad in Canada has high fee investments - wants to switch to index
« Reply #1 on: December 12, 2015, 02:24:13 PM »
I am all for switching to get lower fees and/or DIY investing, but (and it's a big but) the first step is becoming knowledgeable about investments and taxation.  Other than the high fees, are your father's investments appropriate for his goals and risk tolerance?  Does he have an investment plan?  There are a few government pension/benefits plans for seniors, which will he be eligible for and are his investments structured to maximize his after-tax income?

The best thing would be for your father (or you, or both) to become more financially informed so you know the answers to the questions you posed (and what is appropriate for him.) The next best thing would be hiring a professional to advise (but if neither of you is knowledgeable on the subject you are trusting that the professional's advice is what's best for your dad.)  I suspect you haven't had any responses to your post because while it seems like it should be a simple thing (cheaper fees!), investments are more complex than just the costs, and so close to retirement age it's really important to make the right choices. 

(I found Canadian Couch Potato's website to be informative, if you'd like a recommendation on where to start reading.)

max924

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Re: Dad in Canada has high fee investments - wants to switch to index
« Reply #2 on: December 13, 2015, 11:54:12 AM »
I also would recommend reading the canadian couch potatoe website, lots of info there. I recently ended my relationship with Edward Jones where I had a large chunk of my investments. I transferred the funds into my TD bank investment accounts which was extremely easy. TD does have 'financial advisors' that will help you, although I dont really know how good they are as I only use them to set up accounts, etc. What I like about TD besides that I was already banking there is that if you do it right you dont really have to pay any fees other than fairly small MER's on their index funds.

I am by no means an expert in this but I would suggest looking into the TD route, they keep it fairly simple and undaunting for someone starting out on there own. If he really wants to go on his own he should also start doing some reading as far as investing goes if he hasn't already.