Dalbar recently unleashed Canadian mystery shoppers at Canadian banks and credit unions. The shoppers were seeking advice on retirement and retirement planning. In the big bank category RBC came out on top. In Dalbar’s national retirement study TD was back of the pack.
This first of its kind study was a look at how well the banks handled the initial conversation. What happens when you walk into a bank and say ‘help me’.
Here’s the top-line scorecard from the Dalbar study.
The main driver of the higher satisfaction appears to be due to access to planners who have greater qualifications and designations. RBC advisers and planners offered more soft skills and a sense of optimism.
From Dalbar …
RBC representatives used their experience and expertise to ease client fears, imparted useful knowledge about closing retirement shortfalls, and made the client feel it was a financial coaching experience instead of a transactional one.Dalbar
Other insights – what was put on the table?
Rob Carrick also weighed in with some thoughts on the Dalbar national retirement study.
Of course, I’m a fan of Rob’s headline, for the most part. It depends on if you do get a real advisor or a salesperson when you approach your bank. From the Rob Carrick article …
Royal Bank of Canada aced the test – 83 per cent of the mystery shoppers who went there for a retirement discussion saw someone with either the certified financial planner (CFP) or personal financial planner (PFP) designation. At the other four Big Five banks, only between 13 and 43 per cent of interactions were with a CFP or PFP.Rob Carrick, on that Dalbar retirement study.
And or course, if you were not meeting with a ‘person with designation’ you would be sitting with a salesperson armed with a mutual fund sales license. Those folks would likely have no financial planning experience. In most cases they would not know the difference between a mutual fund and an ETF.
I recently helped a friend who wanted to invest in low-fee exchange traded funds. When he went in to talk to his CIBC advisor she told him that ETFs were for day traders.
And of course your bank representative with some impressive letters on the business card can also turn into a sales machine. They are going to offer bank funds. They may or may not pay attention to investment fees.
Big Canadian banks for retirement?
Many will suggest that you can only get decent advice at a bank if you have ‘real’ monies. Let’s start at $500,000 of investable dollars and move up from there. But that does not guarantee success, or proper treatment. At least you’ll be in the hands of a qualified planner. It will be up to you to ask the questions on fees.
If you are early or mid-stage in the wealth accumulation stage, I’d suggest that you avoid the big banks. You might simply need to build wealth in a low-cost environment. That is usually by way of ETFs or by holding portfolios of individual stocks. And of course, there is always those wonderful asset allocation portfolios. As a self-directed investor you can use those one ticket options to create retirement income.
If you want a manged portfolio and investment advice you can approach one of the Canadian Robo Advisors. You can access retirement planning at firms such as WealthBar, Justwealth, ModernAdvisor and Wealthsimple. Many of the Robo’s can be used for accumulation and decumulation.
Advice-only then Robo or self-direct.
While there are some great full-service shops, I like the idea of receiving conflict-free advice. You might consider an advice-only planner. They will then direct you to low-fee investment options.
On findependencehub Jonathan Chevreau looks at a Questrade study that reveals that Canadians are still not getting it when it comes to fees. In fact, here’s a shocking bit …
Yet Millennials and Gen Z seem ripe for the picking here: 42% of investors aged 18 to 34 believe paying more for investments will give them better returns (versus just 18% of the 55-plus cohort).Jonathan Chevreau, MoneySense article.
Nope. While not absolute, fees are shown to be the greatest ‘predictor’ of returns. They have the greatest effect. It largely comes down to your asset allocation and the fees you pay.
Keep it simple. Keep it cheap.
GenYMoney had suggested that we have a no-spend Valentine’s Day. From that post, folks spend an average of $147 on this ‘special’ day. Wow.
Here’s a comprehensive life and money update from eatsleepbreathefi.
Graeme Hughes of The Money Geek turns 50 (welcome to the Club), reflects, and suggests we should invest on our own and prosper. If you need some help, Graeme is there for that too.
Canajunfinaces offers a comprehensive year-end tax checklist.
I really enjoyed this post from myownadvisor, with a January portfolio update and much more.
And always interesting reads and podcasts links on awealthofcommonsense. Here’s the biggest wealth levers. You’ll be surprised to see the rides of US millionaires.
On Millennial Revolution how do Wealthsimple portfolios stack up? Interesting post. They back tested the current assets and asset allocation. But the Wealthsimple mix has been through a few iterations from 2014. I’ll be back with a post or three on Robo portfolio return comparisons.
And last but certainly not least, do yourself a favour and read this post. Evaluating history is difficult when we already know the ending. One of the best pieces I’ve read in a long time.
On Cut The Crap Investing this week …
Thanks for reading this post on Dalbar’s national retirement study, and more.
Canada’s top-ranked discount brokerage.
Cut The Crap Investing readers can sign up with Questrade (Canada’s top-ranked discount brokerage) through this partnership link.
You can buy ETFs for free, including those wonderful one ticket asset allocation ETFs.
While I do not accept monies for feature blogs please click here on the mission and ‘how I might get paid’ disclosures.
Have a great weekend,