Probably a silly question....investing with the big banks in Canada

[botse]

As a recent newcomer to Canada (almost 2 years now) and my wife returning after a long time (16 years) we are at a cross roads regarding who to invest with.

Financial situation is as follows:

We are both 44 years old, no kids (no plan to have kids).

Mortgage 1) Owe approx $487k on rental property on Vancouver Island. About 2800 per month in repayments (Property valued at 700K)
Situation: This is a vacation rental that is exempt from the new rules as it is remote.  Rentals are all short term, mortgage and all bills are 95% covered by renters for the year.

Mortgage 2)  Owe $427K. Payments about 2200 per month (Property valued at 650K)
Situation: Primary residence in Quebec.

* Both mortgages have 25 years left and are with CIBC

Employment: We both work for the federal government with a combined gross income of $180K
As we have recently returned to Canada we have no savings in TFSA and only $6k each in rrsp's.

Investments: Currently we have $550K invested with Edward jones but we are unhappy with the fee structure and the service.

Advice: We have been approached by CIBC and given that we have 2 mortgages with them they have offered a preferential fee rate for transferring our investments over to them to manage. EJ fee rate is 2.65% whereas CIBC have offered 1.5%. Here's the thing, I just don't trust the banks but they have showed us considerable return rates on their portfolios for the last few years, making our returns with EJ pale in comparison. Similarly, we have been burned in the past by financial advisors and it seems overwhelming to try and find a new one here in Canada. I don't really have the financial knowhow to feel comfortable managing our portfolio given that this will ultimately be our retirement plan as we have been ex-pats for a number of years and have not had the means to invest early.

Is CIBC a viable option? if not what would be a better option?

I am happy to receive brutal feedback if need be. I'm tried of not sleeping worrying about this and would like to get our FIRE foundation in a solid place.

Thanks in advance

Regards

[Lews Therin]

I'm a fee-only financial planner here in Quebec, and I can tell you exactly what CIBC is doing, they are showing you their best returns. They have a similar amount of options that were crappier like the EJ ones, but they will show you only the best ones.

There's no way to guarantee that they will continue to do as well.

How about going to self-managed and going down to .2% instead? That's over 5k in savings in fees!

The banks have tons and tons of different offerings, and will continue to only show prospective clients the best ones, which aren't the same every year. It's literally cherry picking data.

Also... If you have a lot of optimization that could be done, why aren't you using TFSAs and RRSPs?

[Lews Therin]

If you change the title of the post to add canada in it, you'll attract more canadians that don't check the "canada" specific subforum

[Freedomin5]

We are in a similar boat. Spent the majority of our working years abroad and could not contribute to RRSPs or TFSAs as Canadian non-residents. We also have most of our investments in a taxable account.

I would recommend self-managing. We are with TD direct investing and it’s quite easy. We don’t have an advisor. We follow Canadian Couch Potato’s model portfolio.

I would also recommend maxing out your RRSPs and TFSAs now that you can access them. RRSPs will allow you to tax shelter a portion of your high incomes, and TFSA will allow your investments to grow tax free.

What we plan to do when we repatriate to Canada next year is to take the dividend income from our taxable account (since we have to pay taxes on dividend income anyway) and put that into the TFSAs. We also plan to max out our RRSPs and fill up any additional contribution room.

[Heckler]

not a silly question, happy to provide the requested brutality.

 you say:
-unhappy with EJ fees
-don't trust the big banks
-don't have financial know how


The only party with a bigger interest than your wife in your future finances is you.   Not EJ, not the banks.

Educate yourself, then take action.  These were my three go-to's when I was in your shoes ten years ago. 

https://www.finiki.org/wiki/Main_Page

https://canadiancouchpotato.com/getting-started/

https://canadianportfoliomanagerblog.com/

[botse]

Hmmm a lot of great advice to go on. I am seriously concerned about making a mistake with our investments so I will definitely have to read up a lot before taking the plunge and trying it myself.

Thank you all for your advice, it has been really helpful.

[RWD]

JL Collins stock series is another great resource
https://jlcollinsnh.com/stock-series/

[sixwings]

Hmmm a lot of great advice to go on. I am seriously concerned about making a mistake with our investments so I will definitely have to read up a lot before taking the plunge and trying it myself.

Thank you all for your advice, it has been really helpful.

I am in Canada and self-manage through Questrade. It's actually very hard to make a mistake with your investments if you do it properly. I use Questrade and own XEQT/VEQT which are globally diversified funds. I also buy a tech leaders ETF (Tec.TO) that mostly follows the nasdaq. My fees are like .25 and since they are such diversified funds it's really pretty safe, at least as a younger person not looking for dividend income in retirement etc. I read the book "The little book of common sense investing" by John Bogle which convinced me to take the plunge. I moved everything from CIBC to Questrade in 2019 and haven't looked back, just wish I had done it earlier. Really the creation of these all in one ETFs has made services like CIBC or EJ completely unnecessary, at least in the wealth accumulation stage. Maybe there's some value there in planning an income producing retirement portfolio when you get there.

I have my more aggresive investment (TEC.TO) in my TFSA and XEQT/VEQT in my RRSPs.