It’s totally understandable that Canadian investors are suspicious. Many Canadians are aware that with respect to the fees charged on their investments, they’ve had the wool pulled over their eyes for many decades. So, what are the total fees charged on the asset allocation portfolios?
It’s a common question, and a common misunderstanding. Rob Carrick of the Globe and Mail states that it is the #1 question that arrives in his email inbox with respect to these wonderful balanced portfolios. I’ve had a few readers seek clarity on the issue as well.
Investors want to know if they have to pay the MER for the asset allocation portfolios, and then also have to pay the MERs of the underlying ETFs.
Finally some good news on fees.
There is no double dipping. For instance, when you ‘pay’ that MER for the Vanguard Balanced Portfolio, you only pay the listed MER.
And from that fact sheet …
This Vanguard fund invests in underlying Vanguard fund(s) and there shall be no duplication of management fees chargeable in connection with the Vanguard fund and its investment in the Vanguard fund(s).
And while you’ll notice the the Management Expense is listed as .22%, keep in mind that taxes and other charges can apply. That top up is mostly thanks to taxes. The trading expenses (TER) will likely continue to be minimal. Vanguard also kindly picks up some additional costs that are incurred in the management of these funds.
The fees charged on asset allocation portfolios are clearly noted. That said, I agree with Rob that the communication should be more ‘clearly displayed’ and the language should be more simple and friendly. You know, as simple and friendly as the investments.
More clarity is required.
Try this. “The MER includes the costs of the underlying ETFs”. If I was still a writer for Vanguard Canada, those words would have been there in some shape or form. Full disclosure I did work on the initial Vanguard Canada ETF launch in early 2013. I was hired as a freelance writer by their advertising agency.
What about BMO and iShares?
Yes, it’s good news across the board. Remember, these are the good guys and gals. They are delivering simple and wonderful managed portfolios with fees in the range of .20% to .25%. Jonathan Chevreau of findependencehub will often write that these are absolute game changers. I agree.
On the BMO one ticket offering please have a read of BMO keeps it simple with their one ticket portfolio solutions.
You also might want to know how to select the asset allocation portfolio that is right for you. If you need any help in that regard please send a note through that contact form.
Halloween week – weekend reads.
First off, we have to give a massive shout out to our good friend Jonathan Chevreau. His wonderful site turns 5 this weekend. I am also a Scorpio. My birthday was on Tuesday. And yes for my birthday you can kindly share a Cut The Crap Investing post or two. Or you can buy me a nice IPA, your call.
My cake had the number 7 after that 5. In 3 years I can collect early CPP, oh my.
And more massive news that shook the Canadian financial blogosphere. Robb Engen of Boomer and Echo announced that he quit his job. Here’s Robb’s most recent Weekend Reading post – I Quit My Job Edition. I am so happy for Robb and his wife. I wish you continued success and I know you’ll enjoy your newfound financial freedom. Robb will now give more attention to his much more lucrative blogging and writing ventures.
Market corrections, it’s all here.
Here is a wonderful post from A Wealth of Common Sense. And here’s a chart that reminds us of why we need to stay invested and add monies through any market correction.
On that same subject Early Retirement Now asks Who’s afraid of a bear market?
And this is one of the most incredible articles I have read all year thanks to Morgan Housel of Collaborative Fund. Here are the most important forces shaping the world. With all of the various links that will keep you busy for a week or three. Please add your thoughts on that (from a societal or investment perspective) in the comment section of this post.
And on the good news front here’s a nice write-up on Kind Wealth. Various forms of cost-effective advice-only planning are taking hold. Kind Wealth and firms such as Money Coaches Canada can fill the advice gap. You don’t have to be rich to get great advice. Stay tuned for reviews of these two offerings and other advice-only shops on Cut The Crap Investing.
And Mark at myownadvisor reconnects with Andrew Hallam – That Millionaire Teacher guy. I’ll admit that’s a book I’ve missed along the way. Must read.
And you have to read my hilarious #humility Halloween post. I went out as a zombie high-fee mutual fund sales rep. “
Must eat mutual funds. Only have mutual funds today” .
On MoneySense, here’s a deep dive into Questrade. That is the discount brokerage of choice for many Cut The Crap Investing readers. And they report back more than favourably. You can open an account through this link.
Full disclosure Questrade is a CTCI affiliate partner. At Questrade you can invest in those one ticket portfolios with no trading costs on purchases.
Lastly. you can follow Rob’s dividend journey at passivecanadianincome.
Thanks for reading. Please spread the word, share these posts and the links to the many friends who contribute to the mission.
If you have a great question along the lines of “what are the total fees on the asset allocation portfolios” fire away. Use that contact form.