Yup it’s time to scare the kids. It’s Halloween. Well except in Montreal and other parts of Quebec where they’ve postponed Halloween. Be safe out there kids. But my hope is to scare the parents with my Canadian mutual fund costume.
I’m still working out the details for the costume. And it’s not the mutual funds that are scary, they are only dangerous if you touch them. It’s the zombie-like creatures that want you to come into contact with those hideous funds.
And they have a one-track mind.
You can talk your face off about low-fee products such as Canadian Robo Advisors or building your own ETF portfolio or perhaps the TD e-series index-based funds, but they’ll have none of it …
Must eat mutual funds. Only have mutual funds today.
Try it. If you’re a TD client walk in and sit down with one of their mutual fund sales zombies and tell them that you’d like to know a little bit more about their TD e-series funds. If you’re at RBC tell them you’ve heard about their new, low-fee InvestEase portfolios.
Robb Engen recently reviewed that offering here.
Then get ready for some grunting and throat clearing and some uncomfortable vacant stares. Thing is, they are only allowed to put you in the high fee crap. The low-fee stuff is not even in their brains or vocabulary. In fact, if they offered you the investments that are in your best interests, that zombie would soon be walking the streets. Yes, that zombie would get the ax.
Must … Find … I.G. … Must. Find. Pri. mer. i …
Why are Canadian mutual funds so scary?
Most Canadian mutual funds come with very high fees. Canadians pay some of the highest mutual fund fees in the world. Those high fees eat away at your portfolio over time. Those zombie sales persons (or at least their masters) are very well fed.
Here’s the trick, you give them your money to invest and the’ll keep almost half of it over your investment lifetime. *Investment carnage may vary.
If you want to discover the long-term effect of high fees visit the site of Larry Bates who wrote the wonderful book Beat The Bank, The Canadian Guide To Simply Successful Investing.
On that site you can use the T-Rex calculator to discover that level of portfolio bleeding over time.
Do you want a trick or a treat?
Don’t get tricked by high fees. Thing is, you can’t really feel or see them. They’re hidden within the funds, they are siphoned off (hence the above bleeding reference). And the fees are mostly not reported. Even on the annual CRM2 statements that the mutual fund zombie sales force is required to provide do not list all fees. Ya, that’s a clever trick arranged by our ‘regulators‘.
I’d suggest you treat yourself to low-fee investments.
The options are shown on this site. And as you’ll see a few of them (rare though) are even mutual funds. Again, you can go ‘Robo’ or self direct your own investments with an ETF or stock portfolio.
And you might access some advice at the right price with an advice-only planner. These folks are not zombies as their lifeblood is not attached to any investment products. They are conflict-free. If you want some names or suggestions in this area, please use that contact form.
More scary moves.
And on that Robo front, here’s a previous Halloween post with 7 Scary Money Moves That Investors Should Avoid. That’s from Invisor and on their site they’ll also break down the potential fee savings and the potential for more fruitful portfolio growth over time.
Thanks for reading. Thanks for sharing. Happy Halloween and be careful out there… Trick or Treaters and investors.