Financial investment costs? Canadian edition

[going2ER]

So what kind of percentage should I be paying for someone to manage my investments? If I have a mutual fund that is 2% is that high? low? I am looking for an approximate number that I should try to keep my costs to. Any help is appreciated as I am new to this. Thanks

[RichMoose]

2% is ridiculously high. Currently my expense ratio is about .10%. I achieved that using a discount broker (Questrade in my case) and purchase low-cost index ETF's with no commissions to purchase in self-directed accounts.

Reality is, if you want someone else to manage your investments it will cost you approximately 1% for that privilege alone, plus more for the fund costs. I would advise you to consider managing your own investments, it is actually very easy.

As far as what your costs should be, keep it below .25% if you do it yourself and below 1.25% if someone is doing it for you.

[rubbertummy]

If you're new to this, you might want to take a look at some of the threads in the forum that cover MERs, Index investing, etc.

Some basics are covered here:
http://canadiancouchpotato.com/2010/01/10/couch-potato-basics-part-1-low-costs2/

If you have a small investment portfolio (under 50-75K) and are making regular contributions the typical suggestion is to take a look at the TD Direct Investing (TD Waterhouse) E-Series index funds (MER 0.31-0.53).  The couch potato strategy and this forum are good places to start learning about your options.

Once you have a larger portfolio and some knowledge, most people are heading toward ETFs.

2-2.5% is average in canada, but it is also way too high.  Over longer time periods %2 makes a huge difference (google MER calculator and play around with some numbers).

[daverobev]

If you don't want to worry about rebalancing, asset alloc, etc, have a look at Tangerine's offerings - 1% MER, only one thing to buy.

TD eseries works out at 0.35% or something like that, with ETFs you're looking at slightly less than that - 0.2% doable for a simple (but effective!) portfolio.

[Getting there!]

I appreciate the "Canadian" information that I can apply to my situation as well.  I'm currently trying to move out of my high density of GICS in my portfolio,  and I'm leery of making a wrong decision.  All very helpful!

[Canadian Nicole]

Have a look at this article on the blog if you haven't seen it yet:  http://www.mrmoneymustache.com/2013/12/15/canadian-investing-with-mr-frugal-toque-part-two/