The headline outlines my favourite subject; leaving your current high fee funds and moving to a better place. And certainly the headline plays off of a wonderful song from Paul Simon, 50 Ways To Leave Your Lover. And ironically one of the most memorable lines from the song is “Get a new plan, Stan”. Yup, we’re going to talk about how to leave your ‘advisor’ and get a new investment plan. In the song we also hear “I’d like to help you in your struggle to be free”. Beautiful. That is the main mission of Cut The Crap Investing.
This week we read of how Robb Engen of Boomer and Echo helped one of his clients with the struggle to break free. But in the process we learned that it was no struggle at all, it was a breeze. To get a sense of how that might feel, click on Summer Breeze and let that play in the background for the rest of this read.
Here’s Robb’s post How To Transfer Your RRSP to Wealthsimple. The outline …
A client asked me to send step-by-step instructions on how to transfer your RRSP to Wealthsimple. He’s moving his $145,000 portfolio from Primerica over to the robo-advisor platform to save on fees.My client’s existing “Asset Builder Fund” charges a management expense ratio (MER) of 2.30 percent – costing him $3,335 in fees each year. A similar portfolio at Wealthsimple is expected to cost just $957. That is comprised of a 0.40 percent management fee for a Wealthsimple Black account (a price break for funded accounts of $100,000 or more), plus an estimated 0.26 percent MER from the ETFs used to construct the portfolio. Is my client thrilled with the idea of slashing his fees by nearly $2,400 per year? You bet!
In the Boomer and Echo post you can read and see the simple steps. Everything can be done online from creating a new account, to the discovery process that helps you get in the appropriate investment, to entering the transfer details. You might be able to break free in the time that it would take to listen to 3 or 4 songs.
And from my experience Robb’s client is certainly going to a better place. When I was an advisor with Tangerine Investments I had the pleasure of moving many clients away from those very same poor high-fee mutual funds and an experience that clients exclusively described as ‘poor’. For more on the new destination for Robb’s client please have a read of Canada’s Most Famous Robo Advisor – Wealthsimple.
If you’re looking to move away from your high fee funds there are certainly many options from self-directing your own ETF Portfolio to a fee-for-service advisor to those digital wealth managers known as Robo Advisors.
If one is looking for the lowest fee Robo environment they might consider Questwealth. For more on Questrade’s offering please have a read of Questwealth Portfolios. A New Name and a New Low-Fee Robo Advisor Champion in Canada. The fees at Questwealth for an account over $100,000 would be .20% plus the (estimated) .20% MER of the ETFs.
The fee savings on Questwealth vs Wealthsimple might seem significant enough, but the winner on the total return performance front will be determined by the assets, the asset allocation and portfolio management. Those factors will quickly eat up a .25% difference in fees. Keep in mind that a major difference between the two offerings is that Questwealth uses a sub advisor that will actively manage the asset allocation while Wealthsimple is more traditional and will rebalance the assets on a set schedule.
Pick up the phone, say goodbye to high fees.
This week I transferred monies to my TD Waterhouse account. The Waterhouse agents now have the ability to take instructions by way of that Telephone Line. For me the process took about 3 songs 🙂 That might be a very smart use of your smart phone. On the discount brokerage front Questrade makes it very easy, everything is done online.
More Weekend Reads
I’ll leave this to two bloggers who’ve already done the heavy lifting and have compiled some great links to blog posts and videos. You can click here and here. And as always, there’s fresh content most every day on Jonathan Chevreau’s Findependence Hub.
This big picture post from Morgan Housel is truly great, please have a read of Death, Taxes, and a Few Other Things.
On the real estate front I wrote on Rent vs Buy. And Sean Cooper of Burn Your Mortgage fame (he paid off his first mortgage in 3 years) is now a licensed broker, you can check out his new site burnyourmortgage.ca.
This week MoneySense posted the ‘Best’ ETFs of 2019. I was honoured to be a panelist. I followed up on this site with more on the Desert Island picks of the panelists plus a few thoughts on the potential evolution of the popular Best ETFs feature.
And most importantly, Charlie says it’s time to …
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Dale at email@example.com