Me, Myself and Investors Group

My interest in all things “finance related” all kind of started a few years ago when I went to a “free investment education session” from work sponsored by Investors Group. They were showing us these fancy charts about how your money can be compounded when held in mutual funds. They asked each one of us in the session to put our names down so they can contact us personally afterward to arrange a free individual session- they told us repeatedly that they are “commission free” so I trusted them.

I met my “investment adviser” in one of the Investors Group fancy offices. The first thought that came to mind when I met my new adviser was that he looked like he was my age (repeat, I am 20-something). I was thinking to myself “er… I’m entrusting my hard earned back breaking money to this guy?” I asked him how many years he has been an adviser and I think he actually somehow managed not to answer my question by giving a circular question in return. Anyway, he was telling me about their “Allegra moderate portfolio B” and how it has performed well and how I should put my money in it. He was trying to convince me to transfer over everything I had in other investment companies to Investor’s Group into this “Allegra moderate portfolio B”, so I could have more “diversification”. Because mutual funds are diversified.

I think I actually asked him: “How I am diversifying when I am actually putting all my eggs in one basket, one mutual fund?” Somehow he said that putting all your money in one mutual fund is in fact diversifying.

I posed the question, so are you going to move my money out of this mutual fund if it isn’t performing up to par? He told me “I don’t have this kind of service for less than $10,000 of an investment” and then proceeded to try and convince me to move everything I had in other investments to Investor’s Group again.

He and his associate were also really pushing the idea of leveraging: borrowing to invest, painting it as a “win-win” situation. It may be not too bad of an idea now; with the interest rates at rock bottom, but the interest rates were way up there when I was working with investor’s group a few years back. They were pretty pushy about it.

No commission huh? (a few years back, I knew NOTHING about MER’s) Apparently I learned afterward the higher the portfolio, the more commission the advisers get. AND their MER’s (management expense ratios: money they charge you to ‘manage’ the mutual fund- investor’s group will get a cut, and the advisor will get a cut) are known to be quite high. They range from 2.7% to 2.9%. So even if you don’t make money or are losing money, you are losing even more money with the high MER! I also heard that they make more commission off larger portfolios (hence his trying to convince me to move my life savings into his hands) and that they make money by lending you money to invest (the leveraging piece of it).

Then, to top it off, I got an email to say that my investment adviser left Investors Group about a year into watching the money invested on my statements slowly dissipate, and I was orphaned. Pretty soon after, I sold my RRSP mutual fund with investors group for (25% less than I put in) and moved it over to a self-directed BMO Investorline.

I learned my lesson- not to be bullied around with flashiness, pizazz, and salesperson speak . I guess they aren’t half bad, but I just didn’t like their pushy style. I guess I realized I have a bit of a “DIY” mentality when it comes to personal finance.

Readers: Have you had experiences with Investor’s Group or similar investment companies? Have they been positive or negative?

About

Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.

370 Responses to Me, Myself and Investors Group

  1. Hi Y&T,

    Another university student here (U of Toronto), could you please let me know how much fine/fee they charged to transfer your RRSP a/c? It’s quite fitting that a google search brought me to this entry because I have just begun to educate my financial knowledge (including MERs and mutual funds). I plan to move my parents RRSP from Investors Group to the TD eSeries fund.

    Any help/advice would be highly appreciated.

    Thanks,
    Jigs

    • @Everest- Hey, thanks for visiting =) To transfer my RRSP, it cost about $150-300 (sorry for the large ballpark range, but it was quite a few years ago). If your parents RRSP is sizable enough (and I hope it should be, since they are close to retirement), then you should contact TD and see if they can pay for the transfer out fee. MOST financial institutions will do this for you, even if the RRSP isn’t THAT sizable. You should talk to the TD mutual fund rep and ask to transfer, then set up your own e-Series after transferring to a mutual fund account with TD bank.

    • Hey Everest,
      Just so you know, I have been with my advisor at IG for 9 years now and have never had to pay a fee. I’ve never written IG a cheque to cover any fees.

      My performance has been good lately and over 9 years has been WAY better than what I used to get at RBC. My advisor sells when I make a profit during a year and buys in bad years and I’ve never paid a fee for any of this.

      My old broker at RBC charged me a fee everytime I bought or sold anything even when he lost me money on stocks. At IG I’ve made more money than I ever did at RBC.
      I’m very satisfied with IG and I don’t pay fees.

        • The fee is hidden within the structure of the fund. So you don’t get directly charged, it just takes away from your fund’s performance. I am locked in and they only I have not moved is because I am not sure what would be better right now in the market.

          Mark

      • You are paying fees..you just don’t see them because they are hidden and not disclosed on your quarterly statement…i.e. you see in year 1 that you made 5% return. If you dig a little deeper, you see that you made 7.7% but the return published on your portfolio automatically deducts the fees paid, so although it looks like you aren’t paying fees, you are. If you make 0% and your fund charges 2.7%, your statement will show a 2.7% loss for the year. Over and above that, your advisor has bought your investments on a deffered sales charge, (look beside the name of your investment, it will sau DSC. Under this charge, your advisor receives a 5% upfront commission on the money invested and you are trapped with IG for 7 years unless you pay back what your advisor received as a commission.

        So yes, you do pay fees, and anyone with IG pays a lot of fees

        • thanks Alex. This was helpful to me as i have read the other 7 year commitment comments…but now understand what the penalty is for

          All in all with my research tonight…probably have changed my mind about investing with IG

          • You’re welcome, IG has a great way of trying to sell the DSC however, they offer all their funds in a number of series. Unless you are investing 250k minimum, you will have the choice between series a and b. Let’s use an actual example…investors dividend, one of their most popular funds charges 2.77% on their series A fund which comes with a dsc and the 7years of being locked in. IG also has the same fund in series B without the DSC, meaning you can withdraw whenever you choose, but the series B charges 2.89%. So they tell their clients that they want to save them on fees by choosing the A series, but in reality they are doing themselves a favor because they now receive an upfront commission and you as an investor are stuck with IG for the next 7 years.

            Invest wisely everyone, and not all advisors are cut from the same cloth, do your dd

            Alex

          • I love picking that specific fund to comment on as well. Great point about the built in choice that allows you to pay a lot, or even more than a lot. Great marketing and organization I have to admit that much!

        • 5%???? what world do you live in. Try 3.2%. Yes IG has DSC funds, so does Fidelity, AGF, Standard Life, Manulife, and every other mutual fund company.

          • Alex mentioned that if you invest $250K minumum, you get a choice between series A (DSC) and series B. Unfortunately this was NOT the case for me. I invested considerably more than that (my life savings) and my (former) consultant did not even mention that no-load funds were an option…in fact, he was not even clear about the DSC funds either. He just told me that all of the money we will ever need would be available for us with no extra charges, even for larger unforseen expenses. This was an outright lie! For close to a year now we have been charged DSC penalties even for our monthly living expense withdrawals. Nothing but crooks in suits at IG!

        • Wow. So many misleading comments here it’s incredible. I work in the investment industry, and have worked for several brokerages and mutual fund companies, including IG (in the past, I no longer do).

          First, in regards to Allegra, to clarify about diversifying while buying one mutual fund, you’re not really buying ONE mutual fund, you’re buying several of them, under one umbrella. You can look up the top holdings of a mutual fund. Typically, you’ll see a bunch of stocks. For a program like this, you’ll see a bunch of mutual funds. Essentially, it’s like buying 8 or 10 different mutual funds. Many different companies offer programs like this, under varying different names. Often you will see them called “asset allocation” programs, or funds. IG has a tendency to be VERY focused on selling their own product (although in some of their subsidiaries, they can handle other companies funds, and stocks/bonds/etc), and therefore, you’ll find nothing but their own funds in there. Other companies (more frequently brokerages) actually have this kind of thing, where there will be funds from various different fund companies. I won’t get into the various ways they operate, but they do shift back and forth between the “sub-funds”.

          Now, commission free, I guess you could call it that. There are two main commission structures – Deferred commission, and front end. MERs aren’t normally considered commissions, they’re management fees. There are other variations of these, like no load, or low load. Those have higher MERs for the most part. Deferred means you only pay a commission if you sell before the stipulated period that you must hold. It differs from fund to fund. 7 years is common, industry-wide. Occasionally you see 5 years, or 8 years too. Typically, the charges get lower and lower through the life of the holding. If you sell after two years, it’s 5%, 3 years 4.5%, 4 years 4%, and so on, and so on. Front end, you pay your commission up front, and that is all. The advisor gets paid up front whether you buy DSC or FSC. The fund company gets the commission back on a DSC purchase through the MER over the years, or if you sell early, they get it back in your sales charge. In addition to that, the advisor also gets what is called a trailer commission (typically about half of one percent per year). That’s paid by the fund company out of the MER.

          You’re being foolish if you think there is ANY investment you can make where there will be no commission or charges going back to the advisor and/or fund company. They do this for a living, obviously they get paid for it. To think otherwise is just ridiculous. What structure you choose to invest in is up to you, and what you think is best for you.

          MERs can vary from company to company, and fund to fund. Definitely true, and you should be aware of what you’re paying. Things like an equity fund, where they’re actively trading many stocks, will naturally be higher than a fund that invests in something like Treasury Bills. Something like this can be readily found, on the web, or in something called a prospectus, which they should be giving you. You have rights and rules in place requiring them to inform you of these things.

          Now, in regards to your remarks on your advisor being in his 20s, yes, that’s not uncommon. To be perfectly blunt, the courses that these people are required to take, to become licensed to sell investments, are not much. To sell mutual funds, you need an MFDA (mutual fund dealers association) license. To sell stocks/bonds/etc, you need an IDA (Investment Dealers Association) license. There are some other licenses out there, like insurance licenses, required for seg funds, and other things, but the main ones are IDA and MFDA. To get your IDA license, you need no post-secondary education. You enroll, get some books, finish one assignment, and two exams (unless it’s changed recently), and you’re done. That gets you started. It can be done in a few months. The MFDA license is much easier. It can be done in a couple of weeks (or at least, it used to be, I think it’s gotten better). SO IT IS VERY IMPORTANT TO LOOK INTO WHAT YOUR ADVISOR CAN DO. WHAT LICENSES DO THEY HAVE. ASK FOR REFERENCES. RESEARCH WHETHER THEY’VE HAD COMPLAINTS. I’ve seen some people operating as advisors that I wouldn’t trust with my money in a million years, and I’ve seen some that I’d happily trust with plenty of it. you have to ask the questions to find that out. That said, the OP made a comment about having a “do-it-yourself” mentality. There is nothing wrong with that, if you know what you’re doing. Advisors do that for a living, so if you can find one you’re comfortable with, it’s probably better than doing it yourself. But, like I say, there are some rotten eggs out there.

          Leveraging – yes, can be an effective investment strategy. But this guy pushing you into it? Wow, that’s flat out immoral. He’s likely looking for the commissions (paid to him… i.e. if not sales commissions, then trailer commissions). More money, more he gets paid. It can work, but it’s obviously higher risk, and if you’re not comfortable, I think it’s terrible that he’d try to push it. It can be dangerous, and it should be something limited to pretty sophisticated investors.

          You seem to stress that it’s an IG thing. You’re wrong about that. These things happen with every company. It’s about the individual, not the company, unfortunately. IG is actually quite reputable, and you would likely find LESS of it with them. I could name a few that are known to be a little more sketchy, but I’ll refrain.

          It’s nice that you have a DIY mentality, but from reading what you say, I’d suggest you do a lot of reading, and understand things a little more than you do right now. Really, everyone should. It’s crazy that anyone would put their life savings into something that they don’t fully understand. Being an educated investor is a good thing, whether you use an advisor, or do it yourself.

          • @Matt

            Thank you for providing an educated opinion. I will say that there are a bad sales people everywhere (statement of the year). Salesman get paid by selling to you, IG rep is no exception. IG has some bad apples but it has a lot of safeguards because it strongly relies on its reputation and believe me a lot of these consultants who end up screwing their clients end up getting caught. I know… I am the guy who catches them. Clients have to understand that if their consultant didn’t do right by them they have the right to send a complaint to Investors Group, and their claim will be investigated at which point Investors group will reimburse them if the claim is justified.

            Matt explained how the industry and Investors Group works. And really there is nothing you can do about getting a scumbag of salesman but as an investor do the smell test and ask yourself? does it stink? Does this make sense?
            I’ve worked for IG (in head office, not as a consultant) for half a decade and looking at the industry as a whole I’ve slowly gained respect for my company, because even though it isn’t an ideal world I’ve seen many cases where our company bent backwards for IG clients, something that I’ve not seen in other company’s (even though I am sure they do that as well). If you are a client and you got (for a lack of a better word) “Screwed” by an IG consultant through misinformation or whatever the case might be, then pick up the phone and call their division or regional director. If you get nowhere, then send a letter to Investors Group compliance department.

          • In response to IGer’s comment

            Regional director was rude, arrogant and ignorant…

            You claimed “Investors group will reimburse them if the claim is justified”…
            This is just wrong! I know you didn’t handle my complaint, SC did and my experience with her made it VERY clear that IG’s ‘compliance’ department exists only as a legal requirement and its sole purpose is to protect IG salesmen and managers (as well as to give clients the belief that they have no case and make them go away).
            IG ‘compliance’ claimed that my consultant (salesman) did nothing wrong…**Why then did the MFDA investigation conclude that my former ‘consultant’ (RC – Niagara office) was in violation of MFDA rules and ethical codes of conduct?? They were provided with the exact same evidential materials and came to the opposite conclusion…
            My former salesman received disciplinary action. The OBSI has now started their investigation.
            Remember, Bernie Madoff also had a compliance department.

          • You’re almost actually correct in that. Compliance departments are a regulatory requirement. But they function to protect the company from their advisors more than they are there to protect the advisors, since the company can be held liable for the actions of their individual advisors. It’s not in their best interests to let unethical behaviour go. I get that you’re angry, but you have to realize that there is a difference between the company as a whole, and the individual advisor/consultant that you’ve been dealing with. In my time in the industry, you’re right, I’ve sadly seen many instances of incredibly questionable behaviour, and coming from many companies. I said it before, and I’ll say it again. You have to research the person you’re dealing with. And as much as some of the comments that some people have made (like teacher man advocating ETFs over mutual funds) can be flat out dangerous, at least he’s advocating educating yourself. Paying an advisor to plan your finances is not a substitute for educating yourself in the matters.

          • Hi, so what would be the reason to come and have a KYC done again if they just want to “move the funds around”? What would be the point if they don’t need your permission. What would be in it for the agent?

            Thanks

        • Hi Alex, I agree with everything you have said about Investors Group. I have experienced it first hand. Are there any other resources one can use to get their DSC fees returned? This of course was refused by Investors Group Sandy Corbett.

          • Hi Susanne,

            I’m truly sorry that you had to go through this. It is not an easy task to get the dsc fees reimbursed, one of the ways that will greatly increase your chances is if your advisor didn’t follow protocol when informing you about buying investments on a deferred sales charge. Your advisor is required to provide you with a prospectus of the investments that were bought, and the advisor should also have you sign the penalty schedule that comes with DSC funds. If this wasn’t done, then you may be able to say that the advisor misled you about the investments. Your 1st calls should go to IG head office, and if you don’t get much traction with them, take it up with the MFDA…

            Hope this helps

            Alex

          • Hi Susanne,

            Investors Group kept over $30K of my hard-earned retirement savings when I bailed out and went over to TD.
            I also ran into a dead end with Sandra Corbett from ‘compliance’.

            Besides suing IG, you can take your complaint to the MFDA and also to the Ombudsman (OBSI). MFDA can only slap your IG salesman with disciplinary action (as they did with my former ‘consultant’, Ron Cherney, of Niagara office). OBSI however, can recommend restitution and your window for taking legal action is extended by the length of the investigation (polling agreement).
            Other methods include staging a protest outside one of their offices (maybe during RSP season or during one of their public ‘seminars’), posting your experiences on many public forums, or making your complaint very public by taking it to a consumer advocate (like Pat Foran of CTV).
            Unfortunately, no matter which approach you choose, it will probably be quite a long time before you see any of your $$ returned, if ever. I have fought them for about one year and so far $0 redeemed. Right now, OBSI is investigating and once this completes I am going to consumer advocate.
            There are thousands of cases like ours where innocent people are scammed by slimy salesmen like Investors Group ‘consultants’. Unfortunately there is very little regulation in financial services industry; still like the wild west of finance. Same in the US too.
            It is a real shame that companies like IG are free to continue ripping off Canadians and the regulatory agencies do nothing to stop them!

            Best of luck!

          • Hi Susanne,

            KYC Forms are required by law to confirm that your Investment choices (or where they put your money) is consistent with your tolerance to risk.

            Higher Risk for Higher Return/Loss potentials

            There’s no benefit to an Advisor to having one of these completed but there should be one done every year to ensure your tolerance hasn’t changed.

            With regards to getting DSC fees back there’s one fairly simple way that might work.

            Go to a New Advisor at another Institution and bring your statements. Tell the new advisor you were not informed of the DSC fees (if this is true of course) and you never signed anything to agree to DSC investments.

            Explain your desire to switch Institutions but tell them you’ll only do it if they can transfer your funds without DSC fees based on your statement that you never agreed to them.

            Most institutions have a standard letter they’ll send to the releasing instution claiming the DSC fees are bogus and demanding a refund.

            IF and this is the big IF.
            If you didn’t agree or sign anything to say you agreed and your old advisor doesn’t have anything to prove the contrary, then you should get your funds transferred without fees (maybe an “industry standard” admin fee of $50-$150 but no DSC fees)

            Now you’re stuck with a New advisor in a new institution however so….?

            Teacherman would argue you’re no better off but perhaps you’ll feel like you are at least right :)

            Good Luck

          • A KYC is required by regulations, and must be periodically updated. They have no choice. If it’s out of date, the account will be restricted from trading of any kind (including, as you put it, “moving funds around”). It gets frozen, and nothing can be done with it, because it’s not in compliance with regulations. Advisors have no choice. A KYC form alone, means absolutely nothing, it’s not a trade. They’re just following the rules. If you’re asking why they would ask for a KYC form to be updated and signed, if they’re just moving funds around, it’s because they’re not allowed to do anything without it. Nothing. Zero.

        • Hi Alex,

          Can you answer a question for me? If an advisor invests 95 percent of ones money in say Investors Group Allegro Balanced Portfolio Class A, can he re trade funds within it and make commission on it since it is a DSC fund? Also how do you know what has gone on if it is all lumped together? Do they send out Trade Redemption sheets?

          Thanks,
          Susanne

          • No. There is no way of renewing the schedule without an actual redemption of the fund. There is no way of an advisor trading within a fund. There are things called asset allocation funds (and I think the fund you mention IS one), and trading on mutual funds within that allocation fund goes on. However, that is not initiated by the advisor, and does not carry an additional fee to you, no renewal of DSC schedule, or anything of the sort.

          • Susanne,

            Matt is right, there’s thankfully no real way to “Churn” clients anymore, I think there has been in most institutions throughout the years, some still allow it to happen.

            Churning is basically conducting transactions for the simple reason to generate fees or commissions.

            If your consultant sells your No Load or Front End funds and buys Back end (DSC) then they will make a commission, such a trade must be explained to and authorised by you though. So if that’s ever happened you can request proof and trade confirmation.

            You can require evidence for any trade except the ones Matt mentioned where the fun basically trades within itself or in the case of a fund closing and a new one taking it’s place, those are automatic and part of the initial purchase agreement.

            For Trade redemption sheets, you should get them for most one-off or unusual trades but common practice is for clients to request not to be bombarded by every little trade receipt (such as monthly contributions) that is however something you can request be re-activated.

          • No, that’s not true, there are many ways of churning, and it still goes on. Less so within a mutual fund company, as when you’re moving betweens funds of one mutual fund company, it shouldn’t really be done by selling and re-buying. Brokerages, intermediaries, etc, who can hold mutual funds from several different families of funds, what is there to stop it? Even within a mutual fund company, it’s still possible.

      • Interesting. I’ve been with IG for over a year now. Want to move to another investment advisor and guess what?!? If I do so before 7 years are up I have to pay almost $8,000 to do so. It’s a DSC (deferred service fee). Despite not being told about it my money is locked into IG essentially or I pay a fee. So if you’ve been at IG for a long time then no you didn’t pay a fee BUT this is how they get ya. Can’t wait to get away, they are a scam!

        • I’m absolutely baffled at how many think that charging a fee to manage your money is a scam. Wouldn’t that be obvious? Did you think that mutual fund companies and other investment firms operated as charitable organizations?

      • I Was a client of IG for over 10 years and I was as naive as you are. Thinking that I was not paying fees.
        I also have never written IG a cheque but the fees come out of your portfolio whether your portfolio is up or down it does not matter. My portfolio was over $600,000 with fees of $15,000 a year!
        IG’s average fee is 2.5%/yearly
        Everyone needs to be aware of the tactics of IG advisers!!!
        If your portfolio is worth $100,000 and is up $10,000 for the year, Your statement will show a value of $107,250 ($100,000 + $10,000= $110,000 – $2,750 FEES)
        The $2,750 is YOUR fee from IG ($110,000 x 2.5% = $2,750)
        So when you open your statement and read your value is now $107,250 you are thinking awesome and are left to think you are not paying fees! BUT you are!!!
        I have just started an investigation with IG head office as to my advisers tactics over the past 10 years.

      • Massive turnover. Massive. Commission payouts are among the lowest in the industry. They also charge the marks hundreds of dollars a month to work for them – that’s right, YOU pay THEM for the privilege of peddling their mediocre, underperforming house-brand funds. The vast majority of the dupes leave after 6 months to a year. The remainder struggle on in poverty for a bit longer before realizing it’s waste of time. They will hire anyone with a pulse, just to get the names and assets of their friends and family, knowing full well the recruit will be history within a year. Don’t be fooled!!

    • I think that 20 year old has to do more research. Maybe he had a bad consultant. But when you cash in a rrsp the government keeps 20% if its not transferred into another rrsp. Not the company. And the allegro fund is a portfolio fund which is actually a combination of several funds within it. Some of the statements are not accurate and a little more research has to be done

  2. Thanks for the quick response Y&T. The pleasure is all mine =).

    As for $150-300 fee, that seems too conservative to me (expecting >500). I would gladly pay that. I plan to call both IG and TD up this week and see what happens. Will keep you posted on the developments.

    cheers,
    Jigs

    • @Everest- Thanks- will be interested to see how it goes. =) Remember, setting up an E-series account takes some patience. =)

    • I am under the impression that an RRSP from one institution to another can be transferred ‘in kind’ with no penalty.

      • That is he case for every company except I.G. If you became a client after July 1st 2006, I.G no longer accepts transfers in kind…amazing how they get away with this crap

        Alex

        • Actually IG does accept in kind transfers through a seperate platform. And they give the clients the options for DSC or NL and disclose everything.

          remember every fund has a MER. The day the MER is too expensive is the day that your advisor stops calling and taking care of you.

          Also the goal of saving is long term.. So if you have a good consultant, why wouldnt you stay with them.. that is why it is important to get to know your consultant and have a good relationship with them

          Every company has good and bad employees. This I am sure isnt any different there.

          It isnt what company you deal with, it is the consultant you deal with. Unless you want to take your chances on your own and watch your own stuff. And personally if you dont even understand why an MER gets charged or why you would choose DSC over NL or ISC or so forth, then what would make you think that you could manage your own fund portfolio when there are hundreds and thousands of funds out there?

          Personally, I would rather pay for good service and the security of knowing my advisor is taking good care of me and that I am 1 of maybe 200 clients than to be with a bank or consultant who has thousands of clients and I just get bunched in.

          • Chalk another one up for having drank the kool-aid. Saying that every fund has an MER is a ridiculous statement. My couch potato portfolio is under .2% MER now, which is about 1000% lower than anything in the the IG mutual fund portfolio. The goal of saving is long-term… AND to keep the investing benefits that should be yours and not the financial industries’. You don’t have to compare picking stocks to mutual funds, you have to compare easily diversified index-investing to mutual funds, and that is where the argument just doesn’t make sense any longer.

          • Breana, you obviously have not researched your opinions very well at all. Churning at investors group happens all the time, basically, an advisor buys a fund dsc, and when the schedule winds down after seven years, they recommend another investment and buy it dsc again. This way, they get paid an additional upfront commission. Also, why do 9 out of 10 clients at investors group have a leverage loan? If I am an advisor that gets paid based on assets under management, then it’s in my interest to have my client take out a loan, invest that money with me so I make more money at the end of the day. This benefits the advisor because they are making more money, the loan always goes through investors as well, so, the company is happy because through the interest the client pays, the company is making money, the client however bears all the risk, and the leverage is usually bought dsc, so if the client wants to get out of it, they have penalties to pay. Finally, transfers in kind are not permitted whatsoever, I would know, I send transfer forms to them on a regular basis.

          • Alex, if you are sending transfer forms to IG on a regular basis I hope it is as an assistant, as you are the most uninformed person on this blog and destroy the credibility. The fact that Teacher Man supports you shows me that he is not the unbiased blogger I once thought he was, and I hope he enjoys his index fund when the next Bre-X Bust happens…the index will serve you very well then – as will your low fees.

            Alex – a consultant does not get paid to switch their clients mutual funds, (some funds do have an upfront commsion, but once a client is invested no additional commissions are earned when switching money around) which is why compensating them based on the success of their clients is in their clients best interest. They are able to move client money around to rebalance without costing the client money, resetting a DSC schedule, or earning a new commission. I’m sure you would be more upset if they made the same amount of money even if you were down on your investment – with the comp structure how it is if a clients loses money, they get paid less.

            Would you feel comfortable putting your name to the statement “9 out of 10 IG clients have a leverage”??? where did you get this figure from? is it the one you made up in your head to help support your point?

            The banking brach IG uses is a subsidiary of National Bank – they are not IG loans funding leverages.

            Leverage is a long term investment strategy. One that should not be undertaken unless you have a long time horizon. They are also not for everyone as their is great risk to the strategy, but the long term approach will reduce that. Since it is a long term strategy it would be best for the client to choose the dsc version of their fund since the MER are in fact lower.

          • Hey STY (love the name by the way, I’m hoping someone chooses “and modest too”). I definitely should admit that I am very biased when it comes to mutual funds. I believe the whole structure of the industry is insane, and is systemically built to take advantage of investors’ lack of financial literacy. I have no idea what you are talking about in regards to Bre-X and all that, the basic math does not lie, the MAJORITY of mutual funds don’t even beat the index BEFORE their soul-crushing fees. So you go ahead and cling to the notion you have found the one special manager that can pick the few special funds years in advance. That’s surely the more logical position.

            It doesn’t matter that the banking branch doesn’t make money off the interest of the actual loans, they make huge amounts off of the increased commissions generated by the leveraged money whether the investor loses money or not!

            I do agree with you on the long term investing focus, and you raise a decent point about long term investors not having to worry about the DSC charges. Still, something is rotten in the state of the mutual fund industry, and it isn’t Hamlet!

          • “Smarter than you” I think your name should just be “IG consultant”. I love that you are very quick to throw insults around when you offer nothing of substance to back up your claims.

            I did not say that the advisor gets paid on every transaction that they perform for their clients, i said that it happens very frequently that i meet with a client that has not cotributed to their portfolio in years and have been clients with IG for over 10 years but yet have a DSC schedule that expires in 6 years. Let me put this in simpler terms for a smart guy like yourself…client has not added money to their account, have been with the company for over 10 years and have a DSC schedule with 6 years remaining…this means that the advisor re-locked the account once the original dsc schedule expired to benefit from another up-rfont commission, no other explanation. Also, for your information, mutual funds allow an advisor the option to charge up to 2% for any switch, but i did not make any accusations of that happening.

            9/10 with leverages at Investors is not published, but based on my experiences in meeting their clients. Also i like the way you tried to slide in that since a leverage is for the long term, its better to choose a DSC structure since the fees are lower…that is a problem, why is there a difference in fees for DSC, FE or NL. In most funds companies, there is not difference in cost regardless of the load type…but i guess the consultants need a way to manipulate the client into choosing DSC on the premise that they are saving fees. The company is a joke, even the globe and mail published an article detailing the madness…here is the link http://www.theglobeandmail.com/globe-investor/personal-finance/investors-group-mutual-fund-fees-among-the-highest-in-canada/article4248318/

            Smarter than you, i suggest you go back to the drawing board

          • I agree that STY sounds exactly like a IG consultant.
            The very same IG ‘financial consultant’ that screwed me over has done the same thing to a close relative of mine. He stuck a 75 year old man’s money into a high MER, poorly performing equity fund that lost about 50% during the financial crisis! This man has been with Investors Group for about 40 years, has not added any ‘new’ money to his portfolio in at least 25 years, and had about 5 years left on a DSC schedule when I saw the papers!
            This is crimminal and the so-called consultant should be in jail, instead of living in his very expensive house.

        • Hi Alex,

          Since there are so many people with complaints across the country, is there anyway of getting organized for picketing or lawsuits? So many similar stories. There must be more people out there who just accepted what happened without complaining.

          Susanne

    • I have to respond to all this, I worked at IG for too many years and drank the blue cool aid, MER’s are high but they are very well trained as salespeople and financial planning and some do a good job, but the funds suck and there’s nothing they can do about it. Something like 85% of funds don’t beat the index, so buy ETF’s instead, ishares, horizon, BMO, etc. Funds that do beat the index are from Front Street, Sentry, PH&N, (now RBC so be careful), Vertexone, IA Clarington, Front Street, Sentry and Vertex are managers and owners so their money is invested along with yours, who better to manage your money if they have skin in the game? Large fund companies (Mackenzie, IG, Fidelity etc).have so much money they can only buy banks and energy companies, very similar to index funds so why pay someone to do that? So to do better you need a smaller company, this hurts me because my clients are invested at these firms and I don’t want the funds to get big. If you are a DIY check out presidentsclub newsletter and 5irearch, the only non biased and money making research I have found in over 20 years in the industry. IG is great for the planning but that won’t help you retire if the performance isn’t there. Good luck.

  3. I want to move some RRSP money “In Kind” from IG to BMO Investorline. How does one go about setting up an E-series account? Thanks,
    Gerry

    • @Gerry- Thanks for your note :) I escape from Investors Group to BMO investorline too. It’s easy- you just need to go to a BMO Branch and set up an Investorline account (the account manager will do the rest for you and transfer your money from Investors Group.. Usually Investors Group (or other institutions) charge a fee for you leaving, around $250 or so, but BMO should pay for it for you if you have enough funds. They might also throw in some Air Miles to you. Though you must be aware that self-managed portfolios like this will charge you $100 a year for a “management fee” for your RRSP.

      BMO investorline doesn’t have an E series account…it’s TD Bank that has the E-series account. Hope that helps!

  4. Don’t even get me started. My advisor from Investros Group is really very immature. I feel like I have to defend myself everytime I talk. Everytime I say something he would says “my track record is flawless!” Also there are lots of fees involved. My portfolio is charged based on DSE. Which means, you really can’t take your money out at all until DSE expires. I am trying to be nice with them right now but I have stopped all my dealings. Hopefully I will find a different place to invest.

  5. My husband has an old RRSP with Investors Group. It started with his union but his union then switched to London Life.
    He makes monthly contributions to Investors Group and of $100 and there is currently about $4500 in the RRSP.
    He wants to transfer the whole investors group RRSP to London Life.
    Investors is asking for $450 to do this + $50 admin fee. Is this right? 10%
    Thank you for any insights

    • @Issa- Thanks for your note. I remember it was about $200 for a transfer. It usually is a set amount (at least from what I can remember). You can ask your husband to see if London Life is willing to pay the transfer out fee. A lot of advisors/ brokerages are willing to do that, depending on the amount in the RRSP portfolio. Hope that helps, Issa.

        • Investors Group also charged me to transfer money out years ago. I think it is their regular practice if you are closing one of your accounts with them (taking all of the $ out).

    • I invested $300,000.00 in 2007 and have slowly removed 40-50,000 a year and have been charged $1200.00 per transaction while they have lost money on my accounts for years

        • IT is a declining precentage fee based on how long you have held the fund with them. So basically the longer they collect their fees with them the less they charge you to remove them. I think you would have to go 7 years to not have fees upon removal of the funds. The funny part is at times they will have decent performance but it all seems to even itself out.

    • FYI, London Life, Investors Group, Great West Life, Mackenzie Financial, Canada Life, and a few other smaller ones, are all the same company. Part of Power Financial.

  6. Investors Group entire system is set up to trap your money there. That’s why they push you so hard to transfer everything over to them. Once it’s there, good luck getting it out. You will become frustrated and annoyed with the entire process and you will end up losing part of your hard earned money to boot. If dealing with them, ask them to disclose the fees and commissions upfront. If they avoid answering the question and talk circles around you, get up and run with your money before its too late. Also, their MERs are among the highest in the industry and they pay themselves before they pay you. So common sense would take you out their front door to someplace else. There are many places out there that are not trying to scam their clients. Be warned!

    • @Joey- That was exactly my experience, Joey. Great words of wisdom in terms of asking for the MER’s upfront. They didn’t tell me either and I was PISSED when I found out.

    • Investors group is really legalized crooks…The salesman talked my husband into borrowing 100,000.00 dollar loan to invest and verbal promises that he could make him profit that would help us to build a house we were saving for. Once he was signed up it was near impossible to get ahold of the salesperson, the money kept going down and down and down losing big time…..once the loan was taken , the salesman thought he had us in a corner, when he was finally told we were getting out before the loan money completely disappeard , his reply was , you can’t because you will have to pay solutions banking back all of the money (they actually have conflict of interest there, that is another story worth investigating). He actually wanted us to borrow more money, all the time we are making monthly payments on borrowed money. What he didn’t know was that we had savings that we had previously saved toward building a house.
      This guy lost 68,000. dollars…and was still making promises….We payed back the loan and ran and when we had complained about him the company said he did nothing wrong. By the way in his office in regina , he is the only one who has an office behind locked doors. Once we met his brother and he actuallly admitted that his brother was a crook, but so what , there are alot of crooks out there..Investors group!!!!!! RUN , you will be glad you did.

      • that is one consultant. I have had a consultant with investors group for years and if you ever feel pressured from any sales person you should back away, but it is unfair to say run from investors group because i have seen that exact same thing happen in other institutions.

        like ive said, its the consultant, not the company.

    • I totally agree, Joey. Their whole business model is based on tricking people to invest with them and they only rely on the sky high DSC charges that exist for 7 long years to keep their clients’ money. All the while they are cutting their clients’ throats with high MERs and horrible returns + very bad investment advice.
      BTW – have you seen some of their ‘portfolio’ type funds? Take for example the Alto Moderate Portfolio-A fund that is sold as DSC, has a 5 year return of -0.17% (as compared to index return of +1.92%), has a MER of 2.64 %…note that this is a `fund of funds` – correct me if I`m wrong but this high MER is charged after all of the underlying funds have also sutracted their MERs. This startegy is only good for the theives that manage and sell jokes like this. As an investor, you would be much better off just leaving your money in a savings account at a bank!

  7. I have been with IG for many years and generally satisfied with their services. This thread is making me nervous! I don’t know much about investments which is why I like the idea of having a planner help me with that. What other company/bank would you recommend? I doubt that there is such thing as an impartial planner who could advise you properly, as after all they all want to sell you a product. No? Thoughts a d comments appreciated!

    • @Steve- I’m sorry about the thread! :) Just sharing my experiences- I think it depends on your investing personality- if you’re more a “DIY-er” then having someone manage your investment money and charging you 3+% annually to manage it might not be your cup of tea. However if you prefer not to have the hassle of researching the best dividend stocks, then investing with a mutual fund seller might be the way to go. I think there are impartial planners, but they charge per session/ per investment and you would need a big portfolio to use them.

    • Consider using a fee for service financial planner; the only “truly” objective financial planner.

      Furthermore, anytime your considering an advisor, a good test of their true motivation is to ask whether they’d recommend using index funds or ETFs. If they dislike using these products, chances are the planner is out for his/her own interest, not yours.

      Not sure where you’re located, but a good fee for service provider I’ve used in the Ottawa Canada region is Daniel Seens of Leaf Financial (danielseens@yahoo.ca)

      • @Chet6- That’s a great “indicator” of truthfulness! It’s like using truth serum to extract truth from them. Thanks for sharing your suggestions!

    • if you are confident with your advisor than stay with them. its not the company, its the advisor. and if you ever feel uneasy about something, then tell them.

      • For example, try telling them that you will not invest in high MER products that give them a commission. If they do that for you without complaint, then I agree, stick with them. I just haven’t heard many stories like this.

  8. I transferred $345,529.94 R.R.S.P. AND LIRA funds from another instution to Investors group February 2003 my portfolio is comprised of R.R.S.P and LIRA funds
    The value as of March 31, 2011 is now $355,013.70 which is less 1/2% Increase per year
    I asked if any deferred sales exist they told me on one Mutual fund because it transferred from one account to another in the amount $1,024.34I decided to another institution When they started to transfer they waited until the market dropped to tranfer the funds and then I was hit by all kind fees when I phoned Investors Group they told me it was transfer out fees I do not know what to do
    After 11 years I am not even getting back my original investments they are Corporate Bandits I need suggestions what can I do
    Beware do not give these crooks any money the only who is making money is Investors Group

    • @Jack Van Horne- I don’t understand- so they were transferring from one account to another without your permission? Isn’t that not allowed? Hmm well, it would be interesting to see the comparison between someone who managed their own accounts with a comparable amount in 2003 to now…In 2003 the S&P was about 980 points, and now it’s 1380 so there should have been a bit more than 0.5% return, though your account was eaten up by the 3% annual fees for the mutual funds, mainly, I think.

  9. I find a lot of these posts to be very disturbing. As a customer for IG myself, I’ve so far been very satisfied with their services. Contrary to a few posts here, they’ve done the following:

    1- Always asked for my permission when shifting funds
    2- Kept an eye on the ROI and if it drops to below their standards and depending on my timeline which I gave them to mature, they will alert me of where they think they should to move it to
    3- Broken down every single transaction in terms of how my advisor gains (commission, cut, etc.)
    4- Always asked me if I have an existing service prior to attempting to sell me one (TFSA for example, TD is notorious for selling this service to people who already have one, they tried to do it to me)
    5- Referred me to outside contacts (not associated to IG) if I need assistance or services they do not provide
    6- Provided me information regarding all the fines, penalties for early withdrawal of any funds

    I am dealing with the Toronto Yonge/Eglinton office. Which ones are you guys dealing with?

    • @Frost- Sounds like you have a great financial adviser! I unfortunately didn’t have as great of an experience. My ROI was negative for two years and he didn’t tell me. He said the markets were doing poorly when I asked him. He didn’t break down every single transaction. He did ask me to amalgamate all my investments to investors group, and he didn’t refer me to outside contacts. I was working with someone in Vancouver.

    • Copied from AP below.

      .. switching funds repeatedly is called churning, and it’s a way for them to renew the commision schedule that diminishes over time. Also known as “flavour of the month” where agents make switches to maximize their commissions.

      Ask your advisor..
      How has your portfolio performed compared with the index or inflation (2-3%/year)?

      • not quite accurate. When someone talks of doing a “switch” in the industry, they are referring to moving from one fund, within a fund family, to another, within the same family. Your DSC schedule doesn’t renew in this case, there are generally no commission charges. If there are, your advisor has written them in.

  10. When my father passed he had close to $500 000 with IG that my mom has been living off. I have a business degree so I have a better than average understanding of the markets. I questioned my mom on some aspects of the portfolio, and her response was that she trusted Tony. One thing I was uneasy with was that IG held a mortgage on her house so she would have more money invested (leveraging) I didn’t want to push my way into my mother’s affairs too much, but now she has told me that she has less than $100 000 left and owes 70 on the mortgage. The mortgage rate she’s had for the last 5 years has been at 5%, and the funds have been getting slaughtered. Even in the last 2 years, when the average for the fund group has been a 9% return, the fund she is most heavily invested in has lost 6%. I gave my mother some questions to ask Tony, such as the numbers to justify leveraging given her existing portfolio, and he has been very evasive. I’ll be sorry I didn’t push my ways into my mom’s affairs when she is living in my basement.

    By the way, switching funds repeatedly is called churning, and it’s a way for them to renew the commision schedule that diminishes over time. Also known as “flavour of the month” where agents make switches to maximize their commissions.

    • @AP- I’m sorry to hear about the situation you and your mom are in. Do you have power of attorney with your mom’s affairs? I think you writing notes to ask your mom’s financial adviser was a good idea… I think that if your mom allows (which she sounds like she will), you should ask to sit down with the advisor and your mom together. One main question to ask is why is the money all eaten up and where did it go? They tried to advocate for leveraged investments with me (making it sound like I was STUPID not to use leveraging) and I didn’t go for it. I didn’t know that mutual fund advisors did “churning”, that sounds sneaky.

      • I got out of a $200,000. investment with IG and it cost me $13,000.I am taking legal action to get my money back,they never spoke to me about trying my money up for any period of time or charges to terminate any agreement.I have been with Nesbitt BurnsScotia McLead and never had these problems,they both charge me 1 % of each trade.The advisor said that he will be fired if I take legal action,so be it,I still have $300 K with him and to think he is my cousin,frcousin

    • from my understanding investors group does not allow churning, and they are one of the highest regulated companies that I have researched. It is from my understanding that brokers and independants are the ones that get paid per transaction. and dont forget about banking specialists that get paid bonuses on performance.

      I may not be 100% accurate, but from my research that is my understanding

      • okay…. TRUE “churning” is selling and buying investments for the purpose of commissions. and it should not be allowed by anyone, because it is fully illegal. to be clear, switching mutual funds is generally fine, because it can be done with no charges or renewing of the DSC schedule. If they are outright sold, and then bought into a different fund, that is different, and would more likely be considered churning. You can move funds from one mutual fund to another in the same family of funds with NO charges. If you have an advisor moving them around and incurring fees and commissions, report him.

  11. I’m in the process of leaving investors group. It has been a painful experience, I have found a fee based planner.

    I was just wondering how long it should take to transfer the funds from IG to my new planner? I have heard investersgroup like to drag there feet when transfering the funds.

    I was told by my new planner 3-4 weeks
    Or can it take even longer?

    Just wondering how long it took for you guys when you left IG?

    Thanks in advance

    Dan

    • @dano- For me, I remember it took a few weeks. You could always call the IG planner you had and ask them… you can also call them if it seems like they’re not owning up to their promise, too.

    • wow, that is crazy that you are willing to pay a fee based manager for funds that already carry MER’s… just cause they charge you a fee, the fund still have a MER and you could end up paying more in the long run??? hmmm.. this confuses me

      • Assuming a fee-based manager worth their salt would never recommend high MER mutual funds because they are a ridiculous investment. Can you be a little more specific on what is confusing?

  12. I have bad experience with IG also, never get back all the money I put in yr of 2000. It’s been over 10 yr, still 10% loss. I don’t understand how come they still can enjoy fancy office, the staff can still surviving? Are we paying them all of these? Who has the authority to watch them?

  13. My good god people I have never seen so much misinformation in my life. I’ll be clear right off the bat. I work with IG, I’m not posing here as an imposter and pumping IG up. Ive been with the company for 10 years. I don’t plan on leaving my name, or my #, or where I work, and have nothing to gain by having random people on a board reading what I have to say. If you think I’m spewing off because if you leave your money at IG, I can guarantee I’m not going to see one red cent from it. In fact, if you took the word IG out of this article and replaced it with CIBC, RBC, or TD, I still have to tell you 85% of the things Ive read here are completely inaccurate. Are there inept people in the industry and at IG….yup. Are there doctors, priests, mechanics, teachers and lawyers out there who shouldn’t be….yup. I’ve read above about churning between funds for extra commission (sorry folks thats only with stock brokers, mutual funds do not pay that way), ive read here that “can you believe they charge you when you lose money through MERs” … folks we arent a charity, yes our employees, offices, fund managers all get paid just like you do. If you are a teacher and the city has a bad year do they ask you to work for free? Anyways……here’s the deal….anyone who posts a question to me I will give you a 100% truthful answer. Some of you can get ready for me to educate you, and some of you can get ready for me to sit here and admit that there are flaws with IG and in the industry, and I will agree with everything you say. I just feel its wrong to read these comments and not jump in. One thing I learned today after reading this thread is how misinformed and confused people are…I am very thankful I saw this.

    • “yup. I’ve read above about churning between funds for extra commission (sorry folks thats only with stock brokers, mutual funds do not pay that way”

      Mutual Funds can pay that way, churning with funds consists of taking units that have matured from funds with a Deferred Sales Charges and buying another investment on a deffered sales charge. Like this, you restart the schedule and the advisor gets paid an upfront 5% commission.

      “ive read here that “can you believe they charge you when you lose money through MERs” … folks we arent a charity, yes our employees, offices, fund managers all get paid just like you do. If you are a teacher and the city has a bad year do they ask you to work for free?”

      I can understand that you aren’t a charity, but charging 2.5-3% annually for underperforming funds is insane. I don’t see anything charitable that you are the only company that buys investments on DSC and doesn’t allow your clients to transfer out in kind to another institution. This is a simple way to deter people from leaving you, at any other firm, a client can choose to transfer their investments in kind to an institution of their choice.

      In your whole reply, you provided 0 substance about why IG is a good company. I agree that there are a select few good people who work there, but they are working off a platform that does a disservice to their clientele

      • Hi Alex,

        I wondered if you could answer a question. My money went to IG in 2006. Every couple of years they would come to “discuss” my investments and always had me sign new papers. Were they reinvesting the money each time. The last time the advisor said he wanted to move some of the investments around. What would be the purpose in this, or what were they gaining, more payment for doing so?

        Thanks,
        Susanne

        • Susanne, just call them and ask them, did they “Switch” the money, or “Redeem and Repurchase”. And if they switched, ask them if they charged a sales fee when they did it.

          Or, if you have your trade confirmations, it will say so on there. It may or may not be clear on statements.

          Is your money still there? Do you have online access? If so, you can look it up there too. Go to the trades in question, click on them, and bring up the trade details. Look for service charges. If they are there, then start questioning them why.

          • Hi Matt,

            I can’t thank you enough for your help. I have sent a request for copies of trade confirmations when they duped me into signing again. I have a witness this time. I think I am going to request copies of all the trade confirmations from 2007. I took the money out and I was charged fees so I think they Redeemed and Purchased them. This happened in June 2011 the seven year term would have been up in Jan. 2013. I told him numerous times I didn’t want any fees. He kept referring it to a long term plan. Anyone interested in joining me for a public demonstration is welcome to.

            Thanks,
            Susanne

        • Hi Susanne,

          Matt is right in his comment, just because the advisor switched things around doesn’t necessarily mean the funds were locked in further. If you are able to look up the transactions online as Matt mentioned, that would indicate whether new commissions were charged. You can also call investor group client services and ask them if you have any penalties on your current investments, and if so, what date did the sales charge originate from. I am sorry you and your family have to go through this, but if the advisor charged sales charges twice on the same money, you definitely have a case to be heard.

          Let me know if I can help you further

          • Thanks for all the help. I am going to fight them. I think it horrendous that they can do this to people. I am going to try in every way to bring this to the public’s attention and I hope other victims will join me. I wonder how many times they did this to my parents over the years.

            I have requested the copies of the trade confirmations for the last time they had me sign their KYC form but I think I am going to request copies of all of them from 2007.

            Susanne

        • Hi Susanne,

          Hope you don’t mind if I add my 2 cents here…

          As Alex noted, the Switch shouldn’t cost you any money but if your salesman did a Redeem and Repurchase then he has probably restarted the DSC schedule and you will be charged a penalty (starting at 5.5%) if you want to transfer $ out before 7 years is up.

          Unfortunately, this is a common scam used by Investors group salesmen to generate new commissions without having the client contribute any ‘new’ money. My former IG salesman, Ron Cherney (Niagara), has tricked me this way in the past and he also used this same con to swindle my parents.

          I hope for your sake it was a switch…

        • Susanne,

          I’m not sure you’re fully understanding. If you’re talking about getting charged fees in 2011, when you took your money completely out of IG, then I can guarantee you that you did. If it’s before the end of your DSC schedule (assuming a back end fund), then there is no way around that. These are not fees you can just opt out of. In fact, there is no such thing as an investment that there are not fees/commissions associated with, no matter what company you deal with. There is likely no recourse on that. When I say look at trade details, I mean prior to removing your money entirely in 2011. If there are unnecessary redemptions and re-purchases, as opposed to switches with no charges, then that’s a potential case for “churning”, and that’s likely the only way/place you’ll get anywhere with a complaint.

          Also, you mention signing KYC forms. That is actually required by them to do. They can lose their licenses, get fined, etc, etc, if they don’t have up to date KYC on file, and they trade. That’s not what you should be looking for (no trading is done on a KYC form alone, it’s just an update on your information). You should be looking at the actual trades.

  14. I was just wondering, sw, how much it does cost to transfer my money out of IG to a self directed account. Thanks for your help.

  15. Hi Ryan
    Depends how you first purchased. Check to see if you bought A series funds or B series. It will show on your statement. If ‘A’ and bought within last 7 years there is a fee to do so. Its a declining fee but starts at 5.5% and declines each year until eventually 0%.
    Cheers

  16. Hi sw,
    I’m considering moving a rrsp and a lif to an online brokerage from IG. All of my mutual funds are non-dsc. What will the fees be to transfer these registered accounts?
    Thanks, lw

  17. I do not work for IG but do work for a company similar to IG. I just feel the need to chime in because as SW pointed out there are so many lies posted here it is getting ridiculous.

    DSC fees are charged by all companies, not just IG, including banks. All companies also have a no load option which would avoid those fees if money were to be transferred out.

    I would address the lies being spread on this message board but there are so many I would have to spend hours doing so.

    • It’s not that they charge DSC fees, it is the fact that they hide this information by “omission” of details. Getting people to sign their paperwork under false pretenses.

  18. Hi lw
    Sorry my reply took so long…..I only check in when I think of it. As for your question. I do not believe you have any fees to worry about in this case as you are Non DSC. All the best.

  19. I am in awe of some of the all or nothing statements made here. People are reading this believing it to be true… Here are some truths for you no investor is the same what works for some may not be in the best interests of others. Haveing said this and looking at your personal net worth statement you look like someone who should be in moderately conservative investments meaning between 4 and 5 ROI. However reading several of your posts you are sounding like you want to be more aggressive. Either way you have done some good and some bad here.
    I will start with the bad DSC charges are good and bad….bad if you want to be taking your money out again in less than 5 years good if you are investing for the future 5+years this is because the MER (which is often around 2% IN Canada not just for IG) is lower on DSC funds than the exact same N/L option.

    MER which you explain beautifully however this is a charge by the fund company and not IG even if they sold RBC funds or your TD funds they still have that MER attached to the fund.

    You make it sound like ROI should be a guarantee they are not. What can they guarantee you ask??? Well i will personally guarantee you that markets will go up and markets will go down and for some stretches they will do very little there is your guarantee….over time however the trend will be up. 9.5% on average for the TSX/year. In fact it is a 70/30 split in years that are up and 30% of the years it will be down.

    As for your bonds and HISA they are in some cases not even out paceing inflation. Ergo when you do pull money out it will buy less than when you put it in!

    You are self edjumacated and that is to be applauded many people simply do not take the time to think about how all this affects them however you have missed the mark on a few and other points I have read.

    IG is the largest or 2nd largest financial institution in Canada along with RBC and depending on the market that day (its that close) with over $120 billion in assets. If they truly were losing everyones money how long would they be around??? surely not the 86 years that they have been. In 2011 the market is down %21 Ig clients are down only 9%. It is a fact that even with 2.5% MER’s proffessional advisors outperform diy’ers by 40% look it up!

    Now i said you did some good things as well which you did. First the reason for a financial planner is they are supposed to look after your money. But you still need to trust them and have regular contact with them every 4-6 months is ideal. So when tthey call you or e-mail respond.

    You talked about diversification which if you had looked up a fund facts for the Allegro fund you blasted you would see that it is infact a fund comprised of mutual funds and thus was diversified. Diversification is they key to sucess 90% of returns are based on solid discipline not the companies chosen.

    You also mentioned leverageing the alarm bells for me are that you were proposed a Moderate portfolio and then asked to leverage!! Leverage is always an aggressive play ALWAYS. It has the potential to make big gains but the losses are multiplied because you still have to pay the loan back.

    I am sorry you had a terrible experience with IG however I am sure there are others who have had worse and many more who have had great experiences.
    Like many things on the internet there are many have truths and self learned beliefs that others will take as gospel truth. There have been a few comments that allude to this already but i wanted to point out a few things as well. Keep learning and perhaps even get a few licences to go along with your beliefs you clearly have a passion to help others which is exactly what a good financial planner should do.

    Lastly and this is perhaps the most important thing you have shown others what a bad experience looks like. If anyone is thinking hey this sounds like me it is time to switch advisors!!

      • If you meant what the GIC rate was then you would have to call an IG consultant to find out. Just to warn you no one at IG plays the rate game.

        The reality is you will always make less than inflation on GICs or savings accounts. Right now savings rates are 1.15% inflation was reported at 1.2%.

        The lower rate is most because the bank is taking on the risk for you and giving you a guarantee, so they charge you more for that. Now if you take that extra risk & invest in a short term well planned portfolio you will make more money.

        IG uses mutual funds for that so there is no guaranteed rate of return. You take on the risk and potentially can earn more than a savings account.

        The level of portfolio personalization depends on how much money you are looking to invest / save.

  20. I had a good experience with Investors group. I invested in Allegro(?) Moderate Conservative as well, and I have had no problems. MER and load structures were explained, and I feel pretty at ease with my decision. Mind you, I have not invested much in this account, and most of my money is still invested in a CIBC mutual fund (Managed Balanced Growth).

    • Your IG consultant gets paid much, much more to lock you into investments with deferred sales charges (DSCs) – Probably the biggest dirty secret of IG is unless they invest you in funds with DSCs, they basically don’t get paid. Yes, the no load funds do pay a small (and I do mean small, it’s 25 bps) commission on the front end, but the planners at IG have so much incentive to lock you in it’s no small wonder that every IG statement I’ve come across since I left has been invested in their A or C series (the ones with DSCs). They will use the excuse “Well the sales charges prevent you from taking the money out earlier”. Please, why would any rational planner who has his or her client’s interests at heart place them in a situation where they had to pay up to 7% just to access their own money? Note: doing a reallocation of funds resets the DSC schedule.
      http://www.theglobeandmail.com/globe-investor/personal-finance/investors-group-mutual-fund-fees-among-the-highest-in-canada/article4248318/

      Toronto star

  21. @young – One qualm that I do have is the fact that one of the advisors I was talking to led me to believe that the Morningstar rating for my current CIBC portfolio was less than that of the Allegro Mod. Conservative Portfolio. I do not believe this is the case. What is your opinion? I’ve just been getting my information from Google Finance. I wish I could find some better free software.

  22. Hello, my wife and I are 30, no savings, no debt, 60k/yr 2 kids. We have wanted to put money away, TSFA, RESP, maybe retirement savings, life insurance etc. We have started meeting with an advisor from IG they only have $1000 of our dollars (already down). As the author of this post mentioned I am also a DIY guy but I am concerned at my lack of knowledge, as well I am scared to death about giving all my extra cash over to a company that could do anything with it. My advisor is very comforting about investments but I know she is just a salesperson. I’m on the verge of calling it quits and going it alone. Anyone got advice?
    Thanks!

    • @Newbie Investor- I think it will cost you money to take the $1000 back from IG for a transfer out, unless the new institution is willing to pay for those fees for you (some are, but for $1000 I doubt it). Have you tried TD eseries or the new ING Street Wise funds? Million Dollar Journey recently did a review on the ING Street Wise funds. I think both of these are a great way to get into the market and “DIY” with less risk due to dollar cost averaging.

  23. Hey Newbie, why don’t you get a alternate investment plan from a bank-owned investment firm like BMO Nesbitt Burns? Ask both about fees and compare MERs on any mutual funds as well as the risk (volatility) of the fund. And track record of fund returns (after fees). Stand your ground about getting answers, these IG guys have balls made of brass! I’m with BMO Nesbitt and am in the process of moving my mother-in-law’s portfolio over from IG. I’ve found that the IG guys are just mutual fund salesmen versus financial planners. This is just my experience.

    • @Been There- LOL balls made of brass? Wow.. that’s an interesting description. I think everyone has a different experience, I found the same thing with my IG mutual fund advisor. However, some people have great experiences. I suppose there’s good mechanics, and there are bad mechanics, just like there are good advisors and bad advisors.

  24. Hello, I am reading these posts cringing. I too have seen minimal returns on my investments with IG. I have been researching how to build and maintain my personal wealth. I have found a vehicle to do this. 8-14% are not unheard of. These are net yields! Plain and simply….mortgages, they are held at “arms-length” using lawyers for both sides of the transaction. You become an investor in real estate through the lending of your RRSP,TFSA,RESP,Cash. I ask you to think outside the box and enjoy real returns, secured by a mortgage and a contractual agreement for repayment. If you have any questions please call. I earn my fee from the borrower and I can help you find the proper client. Now you’re in control.

    Matthew Armstrong
    Mortgage Agent
    mattarmstrong@invis.ca
    fsco#:M100000064

  25. I’m a fellow escapee from Investors Group who’s been with BMO Nesbitt Burns for the past 12 years. I’ve been very satisfied with their advice, the reasonableness of their fees relative to ROI, and the transparency of their fees. Unfortunately, my late mother was an IG client and I see that IG managed to find its way into her will, which contains a testamentary trust for her two adult children. IG was added to the will as the “Professional Advisor to be retained where any services of an investment nature are required”. Sadly, I’m now stuck with IG taking over 2.5% per annum from my inheritance for the next 12 years. I’m 43 years old and have a business degree so it pains me to think of the legal skimming that will continue to take place. Has anyone else seen a client go so far as to list IG in their will? It looks really suspect. I’m almost thinking of going to the media.

    • I am having trouble with IG. I feel they took advantage of my parents and myself. Why can’t all of us who have been taken by IG organize a picket or media conference? I don’t know how to go about reaching everyone who has suffered at the hands of IG.

      Susanne

      • Hi Susanne,

        I feel your pain!

        Investors Group stole close to $50,000 from me by the time I managed to transfer my retirement money out. They have probably defrauded my parents out of more than that. My brother-in-law is also a victim but he doesn’t realize it. I believe it is time for IG to feel some pain as well.

        There is strength in numbers. I am very interested in banding together with others to fight back. If nobody fights back then Investors Group and others like them will be able to just keep victimizing innocent hard working people, and the IG sales force and managers will continue to rake in the millions. I have mentioned the idea of protests in various forums before but I didn’t get any feedback, so I’m happy to see someone else having the same idea.

        As you mentioned, the problem is organizing and reaching out to others. First of all, what part of the country are you in? I am in the Niagara area.

        Do you have a Facebook account? Although I have not had the time to pursue it, I did come across an interesting app (for Facebook, Android, etc.). It’s purpose is to help people to organize peaceful protests; it’s called “Protest4″ and there is a good description of it at . The app itself is available at .

        I am presently fighting IG through the OBSI and have agreed not to take LEGAL action against them until after the OBSI investigation is complete. I will however contact the OBSI to see if I am allowed to protest and / or appear on television discussing my complaint while the investigation is still ongoing.

        My wife and I feel that it is our civic responsibility to let others know about the Investors Group scam, so we decided some time ago that we will forward our complaint to Pat Foran, a consumer advocate for CTV News (Toronto), once OBSI is finished. Perhaps this action too will have a greater impact if more of us approach CTV and give us a better chance of getting on the air.

        As far as a physical protest goes (signs, chants and the like), I think it would be most effective to target one of IG’s main offices and probably in a large city (like Toronto ?). The timing may be important as well; maybe just before or during RSP season. During the summer months most people are busy with vacations, offices are understaffed, people aren’t buying mutual funds, and IG salesmen and managers are probably away at their cottages or drinking martinis aboard their yachts.

        Please let me know what you think of some of these ideas.

        Zig

        • Hi Zig,

          I am willing to organize a protest, the more the better. I have registered my complaint to OBSI also. If we can find out if it is legal for us to do it let’s. I am in the Ottawa area but will travel to any office where we can cause the most attention. I have also emailed Pat Foran. Get in touch with Ellen Roseman eroseman@torontostar.ca. She wrote about a woman who was taken by IG also, maybe if you contact her too she may help us. I also emailed Ted Rechtshaffen attedr@tridelta.ca. He has also done articles on IG. I told him I would email him again after I found out what to do.

          My money in one account was up the seven years in Jan 2013. I had told the agent numerous times that I did not want any fees. He made an appointment to come to my house to have me sign papers to move money around. This time I had a witness with my fiancé, now my husband. He only referred to my investment as a long term plan. No mention of fees or the 7 year lock in. When we wanted to use the money for a real estate purchase he then told me it would cost me to get the money out. The last conversation with him was him asking me if I was I ok with the fees. I said no I am not ok with the fees but I will have to deal with them later. I pulled the account out and was charged the fees. My Dad and Mom who passed away in 2010 had been dealing with them too. I wonder how often they did this to them, the agent was supposedly a friend.

          They turned my RSP into a RIF where I get about $480 a month. They told me this would be better. My other great advisor told me this should never have been done at my age (59). He told me that this is a forever lock in so I have to find a way out of it too.

          I looked up the app you mentioned and I all for it. There must be more people out there who have the same problem. You can email me and anyone else who wants to join us at susanneguymarkham@gmail.com.

          I appreciate you taking the time to talk with me.

          Susanne

  26. This is a great article. Not because it targets one particular company but because it brings awareness to a subject that usually is ignored. That is one of investor education. Unfortunately when one does not have a foundation of knowledge to work from, it is easy to be convinced something that may not be good is good. For instance, just because the market is down 21% this year and IG is only down 9% doesn’t make me feel any better about my investments. A person places their money with a financial advisor and a company so that it will grow. Personally I don’t really care about the billions of dollars that IG or any other mutual fund company has under management. I care about my money. If I was a doctor and 70% of my patients didn’t make it how long would I be a doctor? Statistically (and you can do your own research) 70% of fund managers in Canada cannot beat the primary index they are tracking. But because we have this attitude of ignorance (read “ignore what is happening”) we don’t care until its usually too late.

    Fees are another huge sore point especially in Canada. We have one of the highest fee structures for mutual funds in the developed world. If you want to understand what fees do to your investments go to http://www.getsmarteraboutmoney.ca (an impartial site set up by the Ontario Securities Commission) and run your numbers through the Mutual Fund Fee Calculator. You will be blown away by how much of your investment growth is siphoned off to fees. At 2.5% average MER, easily half of your growth will disappear over a 15 year period.

    Finally (and this is the biggest challenge), the fund industry has followed the “buy and hold” philosophy for years. What that means is your money is invested at all times without regard to market conditions. Why do you think Canadians took such a big hit on their portfolios during the last 10 years. Average returns are about 3% to 5% if you are lucky. Many mutual funds have not made a dime in those 10 years! The industry wants you to think 5% is good but when you factor in inflation at 3% and MERs at 2.5% it is hardly something to celebrate. Yet there were tremendous opportunities to take profits off the table and wait on the sidelines until the markets looked better. Again, its your money, not IGs or RBCs or BMOs or any other company’s.

    Now if you really want to do some research on how well (or not well) your funds are doing, start with independent research. Go to http://www.globefund.com and look up your fund. It will give you a real picture of what is happening. Not only will you see the performance and fee structure, you can look at what the fund holds. If a blue chip Canadian TSX 60 company can pay you a 4.5% dividend (with no fees attached), why would you stick with a fund that makes it sound good you only lost 9% this year?

    From there you can go to the calculator mentioned above and plug your numbers into there. And if you don’t know how to do any of that, let me know and I will show you.

    Oh and one final comment. IG and many other fund companies constantly changes to their mutual funds so it is sometimes very difficult to look at a track record. For example, many of those Allegro funds have been around less than 3 years. Since they are all a “fund of fund” you need to do the research on the underlying products. If you don’t know how to do that how can you establish any track record for potential future growth.

    Hope this helps everyone at least begin to get a bit more knowledgeable.

      • Blue Chip companies even ones that pay 4.5% still go up and down with the market so if you are getting paid the dividend you could still be losing portfolio value. A good planner should explain all of this to you and good planners exist at every institution what is important is that you find one you trust!

        • @Phi- Very true! But the blue chip company doesn’t take an annual fee off your money you see. And you can wait it out- the “loss” is just on paper.

  27. @Newbie
    Hi, I work in financial services, but not a “sales” or client-facing role…here is my advice: you and your wife are in your 30s and have two kids. You make a decent income, but I’d say you should be cautious because yours and your wife’s decisions affect those kids’ futures.
    First piece of advice-don’t use others’ experiences, good or bad, to decide what to do with your money. Same way you shouldn’t take stock tips from a friend. Use your own gut, common sense, research, and sensibility. Second-sit down with an advisor at your brick and mortar bank and also (separately obviously) with your advisor at IG. Before going in, decide not to make any commitments or decisions, you are at that point researching. Pay attention and ask questions (people fail on this all the time and later blame the rep or advisor). Sometimes of course, you are dealing with a not-so-straight-and-narrow individual, but I mean if someone offers you 2% per month on a non-locked in savings account, nobody needs to tell you how true this is (yes I have heard this sales pitch when I was in a sales role before…it was 2% per annum but they would say “2% interest, and interest is calculated monthly).
    Third if you do by personal experience determine that you are dealing with an unscrupulous character, dont just angrily move your money out of that institution, instead find some higher ups to talk to about how you feel you were misled or cheated, and consider switching advisors within that company to avoid unecessary fees. Even if you end up moving to a different company, it should be calculated to your long term advantage.
    Last, if you are so keen on trying your hand at going it alone, then do that. Just not with ALL the money. In any case, I do not think all your money needs to be invested at IG anyways. Reduce your monthly contributions at IG and do something else *wisely* with the extra.

    I know this has been long, but just a point to note as well, customers sometimes give the honest ones a hard time because they want to be schmoozed and made feel like a million bucks, instead of just being given the facts and numbers in plain figures. I moved out of retail banking for this reason as well as the fact that I could not bear to work with the sneaky reps, especially when I felt that management should be doing more. It can happen anywhere though. Scotia, TD, IG, seriously even ING and so on. At the end of the day, it’s YOUR money, pay attention to what is done with it, and make sure your preferences are CLEAR and your goals are REALISTIC.

    good day, and goodluck

  28. As someone who is specialized in Tax and Estate Planning, feel fortunate you choose a place like IG, as opposed to a bank (at any level). Even independent advisors do a better job than banks do. Here are some truths to consider:

    1) Try asking someone at a bank what they should with regards to helping you plan your estate. As them if they know what the word “Testamentary Trust” means and watch almost all of them try to bullshit an answer for you. Testamentary Trusts are a great way for the inheritor to save thousands of dollars in taxes each year. Or HoldCo’s, or IPPs. Anyone with a sizeable portfolio, business, or tax and estate concerns, should be dealing at an IG-type place.

    2) Everyone here makes it sound like no other institution charges an MER. All management money has a cost to it, whether it is an MER, and advisory fee, or a brokerage or transaction fee. If you are a do-it-yourselfer, thats fine, don’t work with an advisor. But don’t tell others who need an advisor or planner not to use one because of fees. On a $100,000 portfolio the difference in MERs between IG and a bank is likely less than $200/yr. because the bank will also charge an MER. But having spent many years dealing with banks, I can say with certainty a CFP certified advisor will add that kind of value in tax savings alone. My friend from high school, who barely passed, started as a teller at Scotiabank and now is an advisor there with no further education and doesn’t even know what a Class mutual fund is.
    3) Think about the place you work at, there are people who are great at their jobs, and people who aren’t great at their jobs. Before you slam ANY company online, consider this before you post. I have had great experiences at restaurants and awful experiences at the same restaurant, the same holds true to any company.
    4) IG advisors, like most mutual fund companies, are paid commission. This is also true for advisors working at banking brokerage levels, like Scotia McLeod or TD Waterhouse. But adjusting funds in a portfolio doesn’t pay them a second time at IG. The nice thing about many of these companies is that they also don’t have transaction fees for every time you need to make an adjustment on a portfolio…. unlike my CIBC portfolio. Nobody is doing charity work for you. How do you think any financial institution makes money?

    5) DSCs don’t matter unless you plan poorly. IF your money is in it for the long haul, then who cares? If you need the money in 5 years or less, than consider choosing a no load option, if not… who cares?
    6) Working with one advisor does not mean putting your eggs in one basket. Choosing a diversified portfolio, even with one company, is what diversification means. Mutual funds are similar across all companies. Example: TD Canadian Dividend Fund, RBC Dividend Fund, Investors Dividend Fund, all have similar returns because if you read each of their prospectus’, the majority is invested in the same underlying investments. It’s your asset allocation that make you money, and regular portfolio maintenance. So if you pick a portfolio made up of the same funds with different institutions, you will likely see a similar return. Pick a place you like and deal there. Otherwise, you might have advisors that step on each others feet because they don’t know what the other one is doing.
    7) Comparing ROIs all the time is like a Nascar race. Sometimes one company is ahead, sometimes another company is ahead. At the end of the day, if you are receiving value added services, like tax and estate planning, then you will be further ahead than someone just receiving investment advice. Things to remember: The markets are exactly where they were 10 years ago for the most part… unless you have been proactively managing your money, you probably haven’t made any money in mutual funds or diverse stock portfolios, it doesn’t matter where you are dealing.

    I could probably keep going, but there is just so much here to address. Not everyone is perfect, any advisor, whether its the bank or IG, wants to consolidate assets. Not everyone is a superstar in every company. But really good advisors aren’t at the bank making $50,000/yr. Because they are at places like IG, or others, making much more with their income dependent on service…. Just like really good hockey players aren’t playing in the OHL making peanuts when they could be in the NHL making decent money.

    • @TEP- That’s true- I could say the same thing about any other mutual fund advisor really! I personally don’t invest my money with the big banks and I’m sure the MERs there are high as well. To each their own- some people would rather DIY, some would rather not worry about it and have it actively managed. You’re right- some are great and some advisors can be bad (just like any professional).

  29. You guys need to chill out. Face it, every financial company MAKES money off of the money you give them. They can label it with any name, but in the end they have to make money…. you expect them to be a charity?

    Keep in mind that if you had just squirrelled your money away under you mattress over the last five years, you have probably LOST money due to erosion of your purchasing power. So it is obvious that if you are going to save and invest, you better do it right.

    Personally, I have dealt with ‘advisors’ from two of our big banks (RBC, TD) and I came to the conclusion over the years that these ‘advisors’ are indeed not educated enough to be doing anything more than selling you mutual funds.

    If you check out IG website, you’ll see “the plan”. Personally, my advisor has been AWESOME from IG. He started with me as a clean slate, and just did information gathering about everything I had (assets, debts, family, age of parents, age of children, my age, and anything else I might care about). These guys at IG look at everything and set up things that my bank has never even mentioned. They are the reason why it seems that the rich do not pay taxes. The big fat-cats are leaving all their money in their “corporations” that they own, but only pay themselves a nominal salary to max out their RRSP room. Thereafter, because corporate taxes are WAY lower than personal taxes (especially at the higher marginal rates), these rich people then BORROW money personally instead of taking money out of their corps as income/dividends. In essence, they pay the lower corporate tax rates and use those same assets as security so they can pull x-dollars out of a prime rate (3%) LOC and spend that money personally. It’s like having personal income without paying personal income tax rates.

    Also, what of those of us who own and run their own businesses? Has anyone ever talked to you about the corporate class of funds and what drastic effect this type of fund can have on your net worth in 10-20 years?

    The list goes on and on…. but all I can say is that IG advisors (and maybe advisors of other firms like Edward Jones, etc) have a far more specialized repertoire regarding estate/wealth management and planning vs. your typical bank employee who did a 6-month CFP course at a community college. In fact my advisor worked with one of the biggest investment banks in Europe, before leaving that high paying but high stress career for what he is doing now.

    As always, your experience may vary from mine…. but once you find the good advisor you will be opened up to a world of things that the wealthy do that keep them wealthy.

  30. I agree that DSC isn’t a bad thing when it’s explained properly, however IG has a 7 year redemption schedule which is REDICULOUS. Also … IG only SELLS IG PRODUCTS… what if a client wants a BETTER PRODUCT from ANOTHER COMPANY? YOU CANT GET IT…

    I have yet to meet someone who works with IG who makes money. Everyone has the same garbage:
    investors dividend-a
    investors dividend-c
    investors allegro modrate portfolio
    investors
    investors
    IGIGIGIGIG

    Instead of buying FIDELITY CANADIAN ASSET ALLOCATION, they sell the IG FI CDN Allocation which is the same fund but with a PREMIUM on it. This is a crook organization and any half-brained investors knows this!

    To compare black on white, instead of selling beutel goodman equity, they repackage it, charge you 1.5% extra and eat up your MONEY:

    http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=17467&companyName=Beutel%20Goodman%20Canadian%20Equity-D

    http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=57740&companyName=IG%20Beutel%20Goodman%20Cdn.%20Equity-A

  31. Hi Young,

    I can understand your experience with Investors Group. I started there back in 1994 for four years before going independent.

    The bigger problem (besides high fees etc.) is there is no “Plan” , (like freedom 55).

    I just hired an assistant who left IG and (as well as Edward Jones) three months ago and the only “Plan” is software based on accumulation and rates of return.

    Even at brokerage house or fee only places most hard copy plans do not cover risk management, or how to spend and protect money in retirement, in all types of economic conditions in good times or bad.

    Important components like liability coverage for auto/home, Trusts & owership, wills & documents are not discussed or reviewed this includes a review of income tax returns and or corporate returns with the accountant.

    In a nutshell there is no conversation with accountants, bankers, insurance agent, property & casualty agent, lawyer, or stock broker…so money is wasted unknowingly or unnecessarily.

    Generally what is reviewed is the old risk tolerance check list. So when the market goes down…you know the rest of the story.

    cheers,

    Brian

    • @Brian- Wow, thanks for sharing- I think your comment adds a whole new perspective because you are a financial planner and you have worked with one of these companies in the past. I felt that was what was lacking during my experience- that the “bigger picture” was missing and that they didn’t address these other important aspects of financial planning. It was just the risk tolerance check list. I don’t know, I remember just feeling confused during the whole ordeal- I was ushered in to a nice building, offered a glass of water, filled out a check list and found out I was “moderate Allegro” and handed over my money. Then was asked to hand over more money (over $10,000) in order to be offered another type of mutual fund. Then another colleague came and explained “leveraging” to me on a blackboard and they both encouraged me to leverage. That was my objective experience.

  32. The leveraging idea looks good on paper and with lots of luck it works.

    Problem is returns are poor (last ten years). People forget about inflation and taxes. You really need need 5% just to break even.

    Rates of return is sexy and planning is not. One hedge fund I follow a lot is http://www.comstockfunds.com/ in a nutshell, they made over 50% in 2008 so they must know something. From their point of view the economy is going to be weak and getting weaker for a long time (well over ten years) because of the sheer amount of debt world wide.

  33. I have recently left my job and I’m looking at getting into the financial services industry. This blog was negative in the beginning but has been more informative as we go along. I’m in my mid 30′s and I’ve always had a passion to be a planner. I’m getting ready to take the leap of faith and get into the field. I had a interview last week with IG and it seemed to go pretty good. I do understand that all companies do have fees, which some I have learnt the hard way. One thing I have always thought about is trying to put the clients needs first. My advisor never really seems to call me when things are up and down. I think that is something I would like to do differently. He does answer my questions when I do call though. I think if you can educate your clients and give them the passion through investing whether with you or some on their own, will go a long way. I’m a bit scared starting off in the short term on 100% commission but think in the long term things would be great. I haven’t taken any of my courses yet, but would like to get my CFP down the road as I need 3 years experience.

    I do like some comments that some people really like their advisor. They feel that their advisor is approachable and is looking out for their interests. That is something I want to do. I feel if you work hard and are honest with your clients that they will love working for you and send you referrals.

    Does anyone have any comments about working at IG? How long would it take for me to see some money? I know that it will take some time to build up a “book” and have saved some money for the time being for a reserve. IG seems to have a pretty good training program as well. Please share….

    • I have worked for IG for 2+ years. Sadly, I have seen many new consultants come and go as it can be a hard industry to survive the first couple years. Consultants must find their own clients and build up their “book.” Aside from generic IG ads which are paid for by head office, we are responsible for our own marketing as well as other costs. I have seen young fresh out of university types and older switching career types. My personal belief is that older types are better able to survive the first few years both financially (either have savings or a working spouse) and mentally (it is rough having periods when all you seem to be hearing is “not interested”).

      That being said, I switched careers at 35 and am enjoying myself. I like helping my clients understand their financial situation and planning for their future.

      • Well the obvious advantage for a 35 year old would be a huge network of professional contacts. Knowing and interacting with other people making higher-tier wages is a great way to set up your book relative to cold calls from a 22 year old just coming out of university. I’m glad to hear you’re enjoying yourself. Can you tell me how you can possibly stomach telling people to invest in mutual funds that pay out 2.7% in MER fees? For the life of me I don’t know how my conscience would handle it.

  34. Would just like to state how after my planner from IG left & sold my portfolio, the new thief took over & instantly lost 25% of my portfolio by switching to their stupid aggressive mutual fund which I would have never agreed to in a million years. I took what was left of my LIRA to my bank ASAP and am wondering who these crooks are accountable to….

    • I’ve been an IG consultant for over 2 years now, and while I agree there are definitely some bad ones (as there are in any company/industry) it’s not fair we’re being tarred with the same brush.

      My parents have been clients of IG for 30+ years and I started investing with them 15 years ago. My experience with my consultant and the help she provided was a big factor in my switching careers.

      Consultants are not allowed to do discretionary trades for clients and all transactions have to have client approval. If your consultant cannot prove that you authorized the transaction (we are required to keep a record of all client interaction) they will be held responsible.

      • Hey Scott, thanks for coming by. I guess if we are really being totally honest, I must admit that I am bias against the whole idea of a MER-driven business model even if all the employees were nice guys/gals. I think that while generalizations are not fair, they are a reality, and plainly there are enough stories about dealing with IG and other similar companies to have a pretty deserved stereotype. I’m sorry if you truly are the exception.

  35. Sandra,

    If you did not sign any paperwork and you want to be make whole, call Investors Group in Winnipeg (head office Winnipeg). Get names and follow-up up with an e-mail based on your understanding of the conversation.

    If you have a good case, IG will want to close the case quickly and quietly.

    cheers,

    Brian

  36. Anybdy can tell me how an ETF makes money?

    http://www.economist.com/node/18864254

    Why is it always the guy or gurl with letters to backup their post with the argument of appeal to authority? i.e. CFP, FBI, BA, MBA, LSD

    anybody actually read the i-shares ETF prospectus and understood it?

    http://ca.ishares.com/content/stream.jsp?url=/content/en_ca/repository/resource/prospectus/ishares_index_funds_prospectus_en.pdf

    Give that a good read…and let me know what you are buying

  37. Dude sounds like a crackpot, I was just at a seminar for IG recently. The way I understand it, they are nothing more than advisers, they don’t actually help with the end point financial decisions. They simply give you an overall idea based on your standings, then it depends on you “the client” how far you want to go etc..

  38. I had an awful experience with IG. I am 53, put in my life savings, unaware of MERs and DSCs. I was asessed as a low to moderate risk investor. I was promised a ROI of 4 to 8 per cent.
    After 4 years with IG my portfolio had lost money and when I opted to exit, I had to pay huge DSCs .
    I even complained to their Compliance Dept, that too wAs a sham. It took them 90 days to send me a letter saying they are lOoking into my. Omaint and need more time.
    My net advice, buyer beware when dealing with IG. Their advisers are merely asset gatherers and have no desire to see your monies grow. They make their money off the first year and thereafter get some meager revenue from you. They take fancy trips, drive fancy cars and live classy lifestyles. It is all our money.

    • @Jeremy- I’m sorry you had that experience :( That’s how I felt with them but again, perhaps we both had bad financial advisors who were representing IG.

    • Hi Jeremy, I had the same awful experience with Investors Group. I was also fromised 5 to 6% per year. At the end of one year I was MINUS 7%. I want to take my remaining money out but they will charge me 5% or more for this privelege.

  39. I’ve been in personal contact with a division director names Lorne Yuffe at 2100 Yonge Street in Toronto. I really like the guy, not because he’s used propaganda to trick and confuse me into believing everything he’s saying (lol), but because he’s blunt, honest, and cares about his clients. I haven’t met a guy like him in awhile but I’m happy to know a financial planner who is responsible and sensible. I’m not a financial planner or a client, but I’ve been at the office and learning financial planning from him. I don’t know if people realize it, but IG now has specialists within their offices that deal with areas such as insurances, mortgages, etc in order to help consultants to better serve their clients just in case if they have any concerns or questions. Being at the office and talking to the consultants when they are not busy with their clients, they’re generally nice people. Not the crooks and scoundrels who lie and cheat just to steal all your savings. Its interesting being in here. They differ from person to person, but the ones who have been in business for years are usually the “good” ones and Lorne is one of them.

    PS. I big common issue is that IG probably has one of the highest MERs (its gotten lower in recent years) for mutual funds, but the entire point of financial planning is that you are paying for their consultation. No matter how informative and investment savvy we are, not every individual pays attention to the stock market and can carefully manage their finances.

    And unless anyone can honestly tell me they would take time and money out of their wallets just to inform and help guide EVERY single friend and family all around them with financial planning, its completely understandable why its there.

  40. Joel,

    I used to be with IG years ago and I have an assistant who work there until the summer of 2011.

    The “Plan” which IG has TV ads on is just a accumulation model. There is no risk management no tax code built in etc.

    Ask the IG person to show you a sample plan and you will see it is based on an “ideal world” which markets only go up.

    The three places where people lose money every day (which is not discussed using the “Plan”) Is the following:

    Financial Institutions
    -fees, commissions and charges

    Goverment
    -Taxes
    -Rule changes (see RRSPs/RRIFs/ clawbacks etc.)

    Corporations
    -Planned Obsolecence
    -Propensity to Consume
    -Syle Changes
    -technological changes (like smart phones)

    What most plans don’t have is a way to test, measure and verify

    Most plans do not coordinate the above

    In the end the goal is to have better protection, less risk, less taxes and have more money to spend in retirement and work in almost all economic situations.

    Fees are important but other factors which the media and others don’t understand are also in play as well.

    cheers,

    Brian

    ps. I have a video which talks about the type of software (which is Macro-Economic in nature looking at all the money going in and out of the model)

    http://www.rightinsurance.ca/video-wim.html

    • Brian, am I to assume you believe the plans you make in 2012 would actually be able to guarantee success in retirement and predict all future events? I think you are missing the point of using financial planning software.

      • Brian,

        You are a fear monger and a snake oil salesman. You seem to be hitting all the emotional points like a good insurance sales pro. I guess as a fee based CFP you do your work for near charity levels? Too bad your software is obsolete before it’s even installed.

        Thanks for nothing.

      • Hi Skeptic/IG,

        The key to financial planning is organize in three areas.

        Risk management ( like insurance)
        Savings (like TFSA, RRSP, etc.)
        Growth (Like Real Estate, stocks)

        The current software Investors Group is based on Savings based on assumed rate of return.

        I don’t see built in scenarios such as stock market downturns, disability, early death, increased taxes, changes in inflation, longevity, etc.

        The end product pushed if a plan is done (which rarely happens). Is “Look what you will have in 20 -30 years or a lifetime.’ This assumes no unfortunate things happen during this time.

        • Brian, by the way the entire planning industry uses the same software just like IG. No institution has an edge over the other, in fact its the the same company that makes the software for US financial firms as well, which is different from the Canadian one of course.

          There is a way that you can show impact of multiple different scenarios. Obviously you don’t know how, and the reality is most advisors like yourself and at IG don’t know how.

  41. Skeptic,

    No one can predict future events. I think you missed the points where people lose money. Corporations, Government,etc.

    Markets go up and down. With the software I use even with low interest rates, and market downturns, one can do better than using traditional financial planning software.

    You may want to review http://www.rightinsurance.ca/video-wim.html for an idea of what I use.

    Let me know what kind of software you use.

  42. Joel/Skeptic,

    Did you find out what kind of financial software they are using?

    In the end the goal is to have better protection, less risk, less taxes and have more money to spend in retirement and work in almost all economic situations.

    Unless these have changed in six months the “Plan” by Investors Group is based on rates of return and no other factors are built in there program. You can get this basic similar software for free off the web.

  43. I have had similar experience with IG. When I initiated the relationzhip over 5 years ago, i had put in $550,000. Over the years, i was losing money (inspite of me being classified as moderate risk). So decided to exit and pay the DSC (seferred charge), which is in addition to MER. I paid $16,000 in DSC. In the 5 years, for the $550,000 that i put in, i got back $524,000. I appealed to the Compliance Department for a review of the DSC. a fairly simple request, that merited a quick ‘yes’ or ‘no’ response.
    It took them 5 months with much follow up on my part to respond with a letter saying that was not possible.
    My advice to all you investors out there is, Please be wary of IG. They squeeze you on MERs and DSCs.
    One is better of going to one of the banks, at least they charge you upfront

  44. Jeremy,

    One idea you could have taken (too late now) is have a fund company pick-up the DSC fees.The problem would still be you’d go into a new DSC. The good news is you could move 10% out every fee free.

    Most independent advisors have software from Moringstar (costs about $500 to $600 per year) They can compare hundreds of EFT’s and thousands (over 6000 mutual funds).

    Since most people don’t have a third party software to compare risk/return holdings, distributions that are taxable (see T5′s and T3′s) etc. They don’t really know what is good or not without a good tool to work with.

    For Small stcoks as an example there is lots of funds that offer better returns with less risk than many ETF’s offered in Canada.

    Hope this helps a bit.

    Brian

  45. The plan to fail hasn’t brought one successful story. The only people who speak positively of the company are its employees. The only credible factor on their side is their size, and the reason for that is Canadians are ignorantfinancially and more moorland, Canadians are complacent.

    Guys, RBC Canadian equity income, td Canadian bond, ph and n total return bond, ishares capped REIT index. Hello!! Ig CANNOT sell these products even though they are better performers at a cheaper cost than their peers. WAKE UP PEOPLE , SUMMA SUCKS

  46. I don’t think you quite understand what a TFSA is, so I’ll try to put it in an easy analogy.
    Imagine a box, which is the TFSA, and in that box you can put a bunch of different objects…mutual funds, stocks, bonds, GICs, etc.

    As such, there is no “interest rate” on a TFSA…a TFSA is simply a vehicle that let’s you save tax free.

    Hope this answers your question.

    -Scott

  47. Hi Newbie.

    I don’t want to sound harsh, and I don’t mean to insult you in any way, but from the sounds of things, you do not seem to be overly educated in finances, and unless it is your job, you never will fully understand that. I would advise staying with your advisor at IG, and telling him what your goals for the future are, and ask him to help you and your wife make a plan using IG’s software (PFP).

    Also, when you invest at any company, your not giving them all you money to do with it what they want…they need your permission to do so.

    Just remember….it is your ADVISOR’S JOB to by a financial consultant, not yours!

  48. My wife and I have been with Investors Group for several years, what I like about them is the Plan, this is not an operation where you put your money in and ask for it when you want a case of beer, this money is long term investing.
    When we started we consolidated our debts, refinanced our mortgage, got some important life insurance and developed a 25 year plan and we are doing quite well. Unbelievably well.
    Shame on the people bad mouthing this firm, they are the 4th largest manger of assets in the world and the number 1 mangers of assets in Canada. Bigger then TD, Scotia bank and CIBC combined. You do not get this big by giving bad advice.
    They completely outlined our lives, built in holidays, my daughter’s education and repairs to our home. They split up our investments in two piles, long term, money we will not need for seven years and just sits there and grows. The second pile is cash that is easily accessible for emergencies or fun, with no fees or surprises.
    So first do your research before you bad mouth this company and I highly endorse them, stop into one of their offices and they will change your life. One last thought, there is not a single financial institution out there that has not lost 10% of your portfolio over the last few years. Only Investors Group will come to your home or their office and guide you on your journey to retirement. My opinion, thanks.

    • Edwin, I respectfully disagree with you. I have done tons of research on all financial companies out there, and I’m not saying IG is worse than others, what I’m saying instead is that the whole business model is ridiculous. Please don’t say things such as “shame on others” when you in fact are the one that has not bothered to check the fine print sir. While it’s definitely possible that your experience with IG was good in terms of customer service, I can guarantee you aren’t getting the most for you money. Please do me a favour and look at your investments. Regardless of how they are split or what term they are for, I guarantee they are invested in high MER funds that will kill your long-term returns. The total return of any portfolio will revert to the mean sooner or later (it’s mathematically proven), so those high fee mutual funds they are peddling to you are a crazy waste of long term money. Also, take a look at your insurance. If you are in anything put term, it is also mathematically proven you are not getting the most out of your money. If you want good advice, get a fee-only planner, and quit pay thousands of dollars in investment returns for what you could get from reading the Wealthy Barber.

  49. In 2005, I went to see a financial planner at RBC to invest some of my money. He asked me “are you an agressive, moderate or conservative investor?” Well, I said “I guess I’m a moderate investor.” He said “Ok.” The next question he asked me is “How much more are you going to put into the account?”

    Five years later, I lost 20% with the investment that this RBC financial planner did for me. In 5 years, this RBC financial planner never called me. Not even once. I had limited financial knowledge then. Being desperate, I tried to pull in the conversation about putting money in the bank with my friends whenever I got a chance. I was introduced by a friend to see a financial consultant at Investors Group (IG). He did a financial review and a risk tolerance analysis with me. At this point, I realized this should be the correct way of doing financial planning with somebody’s money, not just by asking what type of investor I think I am and how much more I have got like RBC did.

    I consequently hear from some acquaintances that banks just don’t do the job they should. I consequently introduce them to Investors Group. I don’t know why some of you here can say negatively about Investors Group. First of all, they do their job in analysizing. Banks don’t. Investment return, in turn, follow the market swings. I have a written financial plan where my Investors Group consultant wrote pin-pointing what I should expect and do during down markets and what he does to maximize my return during up market.

    What else can I ask? If any of you has doubts, try asking a different Investors Group consultant because if there’s one bad apple in the box, it doesn’t mean the next apple is bad too in the box. If you’re bold, try your luck in the banks. Their system just doesn’t set up to help people to have a full financial plan. Banks are bits and pieces, and their employees are paid a salary. That’s why you see some of them don’t even look at you in the eye. They don’t need to think for your well-being unlike Investors Group consultants, they are paid according to their performance. Or else, they risk losing their bowl of soup.

    God bless!

    • Hey Alias,

      Thanks for stopping by. I’m glad to hear that you had a good experience with IG, and I’m quite certain if I ever did a big bank investment review it would be terrible. For that reason I will likely never do a big bank investment review because I will never use the services! I would humbly submit that a “pin-point” financial plan for the vast majority of investors/savers really isn’t that hard. I bet if you read The Wealthy Barber, and clicked around this blog (or several others) for an hour you could do 95% of what your IG advisor can do. In fact, I guarantee you could do better because of the simple fact I keep spitting out on here which no one has been able to refute: IG advisors get paid to push mutual funds!!! Your “fact” that they don’t get paid unless they do well is hogwash. Those MER fees come out of your pocket regardless of how the market does. Go with ETFs and index investing and ignore these false marketing tactics.

      • Most people need advice and thats the reality. I have seen so many investors tell me they just look at past performance and go with that. so many tell me oh they will never invest in the US because they don’t like it. Some say gold is the only thing that they believe will go up. Other claim GICs is the only investment they will look.

        Reality is no one really even has time to read up or understand the basics of investing. And the reality is no one has the time to read through company balance sheets, economic data, know how monetary & fiscal policy actually works.

        Some claim markets are crashing so they are going to short the market.

        There is so much misinformation on the Internet just like this blog about Investors Group. Some points are true though like their higher fees.

        Most DIY emphasize on Dividends and dividends & dividends being the best thing since sliced bread. That is the most misleading criteria to base your investment decision on.

        IG’s goals is to be profitable for Stock holders and Mutual fund investors both. it can be tricky to balance both. So if you buy their funds, why not buy IGM stock as well, essentially their MER profit goes back in your pocket. Investing in both is the key.

        Or you could do the same for any wealth management firm, say if you are in TD funds buy the TD stock.as well If you are with RBC then buy the RBC stock as well. If they charge more fees then it goes back in your pocket as a share holder anyway.

        If you complain about fees and pull out then you are hurting company revenues as well and impacting the stock price, and your investment in the long run. No one wins.

        • I disagree that no one has time to understand the concepts of investing S. The actual “REALITY” is that no one cares about your money as much as you do, certainly not Investors Group advisors or anyone else. You don’t need to know how to read balance sheets or economic data to be a successful investor. You simply need to know your risk tolerance, and then the basics behind asset allocation and how to work a discount brokerage account. That’s it.

          I would actually agree that the best use of IG is to buy its stock (or even better, stock in its parent company – Power Corp), as that is essentially placing a a bet the Canadian investing crowd won’t wake up any time soon. Apparently this has historically been a good bet, but I actually hold out hope it won’t continue too much into the future.

          S I resent the fact you state that this article has misinformation in it and then refuse to point out particulars.

  50. TeacherMan:

    I love your honesty.
    I have a business degree and am questioning about a career at IG , and understand what you mean about the market and that investing in IG would be the best bet. But I want to pay off loans and make money. I feel IG would be a good job , helping people that do not know , or care to know financial issues. Many people get insurance from state farm, loans from bank, if you can help those people with their money , you make a lot.
    Why would you not work for IG ? Do you feel their practices as un-ethical?

    • Hey Bryce, you’re in a tough position and I understand your thoughts about a career at IG. Here is why I wouldn’t want to work there. A large part of your initial compensation package is based upon recommending mutual funds to people. I simply can’t advise people to by mutual funds, especially the ones with ridiculously high MERs that IG pedals. I think your passion for helping others with their finances is commendable, and I encourage you to hang out your own shingle, or find your way to financial advisory small company that has fee-based billing as its main compensation package. Doesn’t it sound more ethical to tell someone that you are worth x number of dollars per hour, and then give them a quote for what they want done, as opposed to trying to recommend investment options that you know aren’t in there best interests? Regardless of the value provided in the rest of the financial planning package, I just couldn’t stomach this.

      BTW, I don’t mean to pick on IG as opposed to other companies of their ilk. The whole commission-based financial advisory industry in Canada is bogus in this regard!

      • My typical client has between $30k-$50k in investable assets. At 2.5% MER that is $750-$1,250 a year. That may seem high, but you’d be surprised at the number of clients who don’t really know the difference between RRSPs, TFSAs and non-registered investments. Also, many of those I have transferred in were people with time on their side (30+ years to retirement) and higher risk profile but the banks had simply put their RRSPs in GICs. I know those clients are better off in equity funds with our MERs compared to having it sit in GICs at banks. I have helped people restructure debt to free up even $100 per month to invest or buy insurance while at the same time have them on a debt repayment schedule no different than before. Are you telling me it’s better that they paid that $1200 to the credit company as opposed to $30 in MERs and $1170 in RRSP?

        • That is extremely high Scott and you know it! You’re absolutely killing their investment returns. When you show it has a yearly fee it doesn’t really do it justice because what you’re doing is killing their compound interest going forward. In reality you’re costing your clients tens of thousands of dollars. I’m not saying your mutual isn’t better than GICs but again you completely distort the point. I’m saying the little bit of advice you give most investors is NOT WORTH the huge amount in investment returns they are sacrificing by going with you!

    • I’ll give you my advice as someone who has worked as an IG consultant for 2½ years. Here in Calgary, I would say 1 in 10 new consultants make it past their first year. I was the top year 1 producer for my calendar year and I made $60K that year (which includes the 50% 1st year bonus, so if I brought in the same amount of business this year, that would only be $40K). My second year I didn’t do as well. After seeing so many people try and fail,I flat out told my director to stop hiring fresh out of university people because the opportunity to make more money in the short term is everywhere here in Calgary. I have dipped into savings because as the sole earner in a family of 5 we have higher expenses but I am in it for the long run and know that if I continue to grow my business it will be worth it.

    • With all due respect, I would have to say I disagree with Teacher Man.
      I work at Investors Group, and strongly believe that mutual funds are the best product for most investors as they provide instant diversification.
      I’ll admit, our MERs used to be above industry average, but have since been decreased to match the average.

      In regards to our compensation, commission-based compensation makes sense to me. My income is based: 1) If I sell a product, I get a commission, 2) If I keep a client for 7 years, I get a bonus, and 3) As my clients’ assets increase in value, I receive a larger trailer.
      2) and 3) increase my incentive to keep my clients happy, service them regularily, and grow their assets

      In addition, a large portion of our compensation comes from insurance sales (CI, DI, LTC, life).

      Also, the planning that we can do is superior to most avereage investors. For example, just the tip of the iceberg:, investing a large amount of cash flow into par insurance and using the cash value to fund part of retirement, therefore decreasing taxes in retirement. Using Corporate Class mutual funds to defer taxes (much like an RRSP) and withdraw from principal first, thereby further defering taxes.

      However, do not go into this business thinking it is easy. In my first 6 months I made about $2,000, which is not enough to pay the bills. However, once you find out how to run it, it can be VERY rewarding, both in income, and knowing that you are doing a very good service for you clients.

      -Scott

      • Hmm, looks like we have 2 Scott’s that work for IG here. At least the little colored icons beside our name seem to consistently distinguish the two.

      • Scott, first off, thanks for identifying yourself as working for IG right up front.

        Please tell me why you believe mutual funds are a superior tool to ETFs for diversification purposes?

        Wouldn’t your compensation be much less skewed if you got equal amounts of money for recommending any product? How does that not bias you towards recommending certain mutual funds regardless of their performance?

        I won’t get into my specific thoughts on the insurance side of the business, because that’s another argument altogether.

        The vast majority of investors don’t need par insurance. I’ve debated this with several financial investors before and unless you have used up every ounce of room in your registered accounts, Corporate Class funds are also a terrible option. I would also argue that there are much better options available even once you have maxed out your registered space, but at least then it becomes a debate.

        I know that you don’t start out making much as advisor, and I’m not trying to label advisers as greedy people, but the entire system is flawed in that it encourages advisers (who are making fairly meagre wage relative to their education levels) to recommend biased products instead of impartial information. When you look at the simple math of ETF returns vs mutual fund returns it simply doesn’t add up. Burton Malkiel in “A Random Walk Down Wall Street” basically totally refuted the whole idea of mutual funds. In an extensive study done from 1975-2006, 0.6% of mutual funds managed to beat their benchmark after fees were calculated in. How can you in good conscience recommend a product like that?

        The bottom line math here guys is that MERs will end up costing most investors tens of thousands if not hundreds of thousands in returns over their lifetime if they are consistently investing a few hundred bucks every month. So the question for the public really becomes, is all the other stuff you guys keep referencing worth that much money? Or is worth more like the $500-$2000 most fee-based advisers would charge their clients upfront for a full financial plan? That’s all there is to this argument no matter what distractions you try and present.

        • I get paid a commission for selling funds but if a person really breaks down the hr/rate for planning, meetings etc…how much do they really make…I have ran the numbers and it isn’t so advantageous! The question(s) above all this is: Do you or anyone work for free? Do people need help financially?

  51. From http://opinion.financialpost.com/2011/12/01/ok-investors-group-now-the-gloves-are-off/

    Here’s why Investors Group has little or no interest in helping clients. They have one of, if not the highest Management Expense Ratios (MERs) in Canada. Hell, they might even be a world leader in this area. Everyone in the investment industry knows that the higher the cost the lower the probable returns. If you look at the overall performance of their family of funds it’s poor because they’re feeing clients to death.

    Investors Group talks about helping Canadians and The Plan. Of all the people I’ve spoken to that have worked for Investors Group every one of them have told me they do it only on a selected basis and that they are in fact “not that technically detailed.”

    Investors Group still allows their salespeople to sell Deferred Sales Charge (DSC) mutual funds. This is a practice which should be banned. If Investors Group were truly interested in helping Canadians they would put a stop to this immediately. No financially educated investor would purchase a product that had a DSC attached to it. As I’ve asked repeatedly, “name one thing that’s beneficial to a client about a DSC?”

    Mr. Regan says for 17 years they have been partnered with the Canadian Foundation for Economic Education (CFEE) on the money and Youth program that helps young people acquire the tools and understanding they need their economic and financial roles, responsibility and decisions with confidence and competence. Then he goes on to say “In fact, we were one of the participants in the development of the program content.” Wow, as far as I’m concerned that’s one of the problem we have in the world today. The people who are creating the financial products of mass destruction are the ones doing the educating. Isn’t that how cults get started? Bring young people in and educate them in your own image? Didn’t Investor’s Group use to be named Investor’s Syndicate?

    Jonathan, I commend you for the work you do and what you said in your article on November 12th “Banking on our lack of financial savvy” was bang on right. Mr. Regan’s comments about you being wrong were a lame attempt at trying to cover up the truth about the financial services industry. Financial illiteracy is big money and Investors Group knows it. If Canadians were truly financially literate Investors Group would be no more.

    • Thank you Bryce! Great point on the Deferred Sales Charge mutual funds. I also love the term “not that technically detailed”. How insane is the statement when it concerns someone’s finances! Please stop by again!

    • What does the fact that Investors Group used to be named Investors Syndicate have to do with anything? Are companies not allowed to change names? How many banks have their original names?

      Absolutely, if Canadians were truly financially literate then IG would be no more. The same could be said about your company TPC Financial Group. If everyone could fix their own cars, we wouldn’t need mechanics. That’s why service industries exist, because some people know more about something than others.

      I’m an IG consultant and I sell DSC fees on money that a client has told me is for long term purposes (i.e., retirement) because, the way it is structured currently, it’s in the clients interest. IG’s no load fund MERs are slightly higher than DSC MERs and if I am truly looking out for the clients long term interest, absolutely I should be saving them fees. In case that doesn’t address your “one thing that’s beneficial to a client about a DSC” question, another benefit to DSC is to overcome investor psychology to redeem their long term savings to buy a luxury item and having to pay the DSC fee serves as a check on that.

      Are you seriously saying that financial planning is a weapon of mass destruction?

      • If financial planning is such a detriment to people, how does one explain the following report (https://www.ific.ca/Content/Document.aspx?id=6190) that shows that households with an advisor have more investable assets that are multiples higher than those household that do not. It seems pretty clear from that report that the financial advice industry is helping Canadians.

        • Scott, for a guy that has so many 500 page manuals to read, you sure have plenty of time to comment on blogs! At least I have an excuse, being that it is summer and I’m a teacher and all.

          Again your point completely diverts from the main point and misrepresents my position. The conclusions you are drawing from a study that obviously has built-in biases are flawed, but that is irrelevant to the point that we are simply not debating whether financial advisers are good or bad. I maintain they are highly overrated, but my central premise is that they are certainly not worth the ridiculously high MER fees that IG advocates. You can’t win this argument because you are so obviously wrong. There is a place in the market for fee-based financial advisers, commission-based fee structures are flawed and you know it. I suppose we’ll now have to suffer through more gas jockey comparisons…

          • I live in Calgary, which if you’re not familiar with we have this little thing called the Calgary Stampede on right now, which in reality is an entire week of drinking and partying for many industries. People don’t want to think about this stuff during Stampede. I don’t drink, so I’m using the time to catch up on financial blogs and do some studying. Perhaps doing both at the same time is why I get testy when people say that we do nothing that can’t be found in a few books. So, if you want to talk about misrepresenting things, I can easily say the same about you.

            Absolutely, we are debating whether financial planners are good or bad if you are talking about high MERs. As I mentioned elsewhere, your position is like only looking at the sticker price without considering the full value received. I know you probably do all your own home renovations, but would you recommend to others that they just look for the cheapest contractor or should the actually see what they are getting for their money?

            What, in your opinion, are the obvious built-in biases and flawed conclusions from that study? Have you read that study before or in the 5 minutes between my post and your reply did you go through the entire 91 page presentation?

          • Misrepresentation? Wow, I think this back and forth has almost ran its course boys. As usual your mission to distract from the central point and the truth of the matter is astounding. My position is not like hiring someone to do my home renovations at all. To use your analogy, I actually suck at home renovations. When I look for someone to help me out, do I look for a guy that gives me a quote up front, or do I look for a guy that says he won’t charge me much up front but there will be some hard-to-define fees on the materials I’m about to buy, but we’ll figure that out later and that material cost will somehow compound for as long as I own the house.

            I looked at the preliminary pages of the study and the whole premise is flawed. Obviously people that go to an investment advisor are going to have more assets than people that don’t because the people that actually go to an advisor presumably have assets in the first place, whereas a major part of the population has no investing assets to speak of at all. A great use of statistical lies.

            Here is the extremely basic math that supports my claim:

            If hypothetical Investor A has $20,000 in equities at the age of 30 in a registered account, and we assume an 8% benchmark equities annual average return over the next 35 years, a broad-based ETF, with all-in commissions and MERs calculated would return 7.7%. A 2.5% MER that is fairly average at IG would give us a 5.5% average annual return (assuming it is an above-average mutual fund that can actually match its benchmark index which the VAST MAJORITY DO NOT!) While you might be able to justify your services to many investors with those relatively small percentage numbers, let’s take a look at the difference to the overall equities portion of Investor A’s portfolio over the next 35 years, and this is assuming he doesn’t invest a single penny in equities the rest of his life! (Just to keep things simple.)

            Investor A with IG – 130,276.50
            Investor A with low cost ETFs – 268,274.63

            Now you can try and spin those numbers however you want (which you will no doubt try to do), but those are the basic mathematical facts behind the compounded returns that you destroy with high-MER mutual fund recommendations.

            You (and many other mutual fund advisers out there to be fair) are fond of pointing out the many other services you provide clients with. I’m not debating that these services do hold some value. While I believe people would be much better off educating themselves, we can agree to disagree on that point and simply agree that the other personal financial information that you provide clients with does have some value. The question simply becomes:

            IS THAT INFORMATION WORTH THE SACRIFICE that is undeniably shown above. It is extremely difficult to make that case. You can talk about investing to beat the tax man through insurance, and corporate class mutual funds (see my post on why those are bogus) all you want, but it simply DOES NOT make financial sense for the vast majority of individual investors to go with a financial advisor that recommends high MER mutual funds!

          • Hmm two Scotts recommending a bias slide show that both work for a company the directly benefits from recommending investment products “without bias” that they subsequently earn huge amounts of commission on.

            Have a nice weekend everyone!

            (Game, Set, Match)

  52. ” investing a large amount of cash flow into par insurance and using the cash value to fund part of retirement, therefore decreasing taxes in retirement. Using Corporate Class mutual funds to defer taxes (much like an RRSP) and withdraw from principal first, thereby further defering taxes.”

    Which of course should be done AFTER RRSPs and TFSAs are maximized. This to provide tax sheltering on non-registered investments

  53. Hey Scott, or Scotts for that matter, if you want to change that little picture you can sign up here, http://en.gravatar.com/. That way, anywhere you comment, you will leave the same little picture everywhere, its tied to whatever email you use to comment so it will help tell you guys apart. I also unapproved a few comments of your comments by accident (never going to try editing this site from my phone again). I have re-approved them though, my apologies for the multiple emails from the “new comment” notification.

  54. I think this back and forth has almost ran its course boys. As usual your mission to distract from the central point and the truth of the matter is astounding

    You are right, it has run it’s course. When you guys started deleting posts and selectively deciding which ones to approve and which ones not to I know that you are not interested in free discussion. Unfortunately for your readers, I know this comment won’t make it up either, so they won’t see the tactics you use in a “debate”

    • @ Scott – Again, it is standard practice for bloggers to “approve” every comment before it is published. This is to control spam and to keep everything “PG”. I never deleted any comments becasue everyone has been keeping the comments clean. If there is any swearing we would just replace it with a few of ****. I just delayed the comment being published so I could look it over after I got back from my lunch break ;). Some of the comments are getting longer than the post itself so it takes me some time to do!

    • Wow… *shaking head sadly*

      All comments were put up Scott, we had a brief SNAFU over lunch. Relax man.

      I’m still just amazed at how often you peel yourself away from work with all those 500 page manuals and important talking points to distract from high MERs that you have to memorize. I don’t know where you find the time to help us out by adding content and followers to our blog buddy.

      • As I explained, it was a slow day yesterday due to the Stampede here in Calgary, some people drink, others spend time on internet forums (it’s sad, I know). I have never shied away from a debate and I’m not about to start. The funny thing is, each of us is confident we are winning the debate, you have talking points about big, bad greedy IG for your DIY visitors but I am also ahead because I am better prepared to counter argue questions about our high fees. If I can get 1 extra client thanks to our debate, it will be worth it. Look at that, a win-win for both of us

        • Haha a win-win now there is true irony. Scott to be honest, if anyone believes that I lost this little tete-a-tete that we are having it is solely based on my lack of debate skills because there is no quantifiable way no matter how hard you try to spin that 2.5% MERs are justifiable. There is no way that the advice you provide people is worth that sacrifice on investment returns. There are many other points we disagree on, but that basic core logic at the heart of this argument is simply that fee-only advisers are a much better model for compensation and that pedalling the mutual funds that make up the vast majority of IG’s clients’ portfolios is fairly dishonest.

  55. Obviously people that go to an investment advisor are going to have more assets than people that don’t because the people that actually go to an advisor presumably have assets in the first place, whereas a major part of the population has no investing assets to speak of at all. A great use of statistical lies.

    This will be my last post, as I know from this comment you have no interest in reading anything that is contrary to your belief. You clearly ignored the section that dealt with that issue.

    The graph entitled “Value of Savings/Investments When First Using an Advisor” reports that 37% of people had under $10,000 when first seeking out advice. 20% had between $10,000 and $24,999. 17% had between $25,000 and $49,999. That means that only 26% had more than $50,000 when they first sought out advice.

    Further, the graph for the question “And when you first started working with a professional advisor, which of the following best describes your situation?” 67% responded “You didn’t have much savings or investments, but you wanted advice on how to start investing and grow your assets” as compared to 33% that responded “You had accumulated significant savings or investments.”

    It seems pretty clear to me from those numbers that it’s not a matter of those working with advisors having assets in the first place that explains the difference in net worth, it’s the fact they are getting advice that leads them to higher success.

    • Scott, again you distract from the main point. The whole idea that someone would come to you with $10,000 and you couldn’t make it grow somewhat and then say that, that is progress is ridiculous. You put blatant propaganda on my site (which I let go by the way in the name of fairness – let it not be said that we did not allow Investors Group to have representation in this debate) and then expect me not to point the basic bias in the argument? Here is the math people if you didn’t catch it the first time:

      Here is the extremely basic math that supports my claim:

      If hypothetical Investor A has $20,000 in equities at the age of 30 in a registered account, and we assume an 8% benchmark equities annual average return over the next 35 years, a broad-based ETF, with all-in commissions and MERs calculated would return 7.7%. A 2.5% MER that is fairly average at IG would give us a 5.5% average annual return (assuming it is an above-average mutual fund that can actually match its benchmark index which the VAST MAJORITY DO NOT!) While you might be able to justify your services to many investors with those relatively small percentage numbers, let’s take a look at the difference to the overall equities portion of Investor A’s portfolio over the next 35 years, and this is assuming he doesn’t invest a single penny in equities the rest of his life! (Just to keep things simple.)

      Investor A with IG – 130,276.50
      Investor A with low cost ETFs – 268,274.63

      Now you can try and spin those numbers however you want (which you will no doubt try to do), but those are the basic mathematical facts behind the compounded returns that you destroy with high-MER mutual fund recommendations.

      You (and many other mutual fund advisers out there to be fair) are fond of pointing out the many other services you provide clients with. I’m not debating that these services do hold some value. While I believe people would be much better off educating themselves, we can agree to disagree on that point and simply agree that the other personal financial information that you provide clients with does have some value. The question simply becomes:

      IS THAT INFORMATION WORTH THE SACRIFICE that is undeniably shown above. It is extremely difficult to make that case. You can talk about investing to beat the tax man through insurance, and corporate class mutual funds (see my post on why those are bogus) all you want, but it simply DOES NOT make financial sense for the vast majority of individual investors to go with a financial advisor that recommends high MER mutual funds!

  56. Since when are facts propaganda? That study was not done by Investors Group and the surveys were done by Ipsos and Polara (in case you haven’t heard of them, they’re just little companies that do surveys on just about everything). Just because you disagree with something does not make it propaganda.

    Absolutely, I will not disagree with your mathematical facts. What you forget/ignore/fail to grasp is that there are many other factors involved other than just mathematics.

    What happens if Investor A waits until he is 40 years old to start. Using your same 7.7% return, he would have $127,768. I have no doubt that I have clients now that would otherwise have not started investing. You know as well as I do the power of compounding and even a 10 year difference with your higher annual returns means a lower net worth.

    What happens if the markets tank 20% in a year (which isn’t uncommon especially when considering a 35 year time frame) and the DIYer gets scared and moves into money market funds and misses out on a rally? There is a great book called The Behavior Gap that shows that the average investor over a period of a decade trailed the S&P index but 4% points (of course, you’ll probably dismiss that as propaganda as well). Sure, you can attribute some of that to fees but that doesn’t explain the full difference. If I can hold a client’s hand and keep them in the market in bad times, that has value that cannot be underestimated.

    Sure, $138,000 looks big and scary, but those are dollars 35 years in the future. In today’s dollars, assuming 3% inflation, that difference is around $49,000, still a large number but that works out to $1,400 per year. Better yet, if I tell my client to invest $100 extra a month, that difference is eliminated. What does your typical hourly based fee planner charge, $150, $200, $250? I can tell you that between initial setup and implementation, ongoing monitoring, annual reviews, major life change events, etc, 10 hours per year isn’t unreasonable.

    I absolutely believe my clients should be educated. As reported in Canadian Business, a recent survey (I know, more propaganda) found that only about half of Canadians knew about the recent changes to mortgages. Guess what percentage of my clients knew about it? 100% because that’s the kind of thing I inform my clients about in my weekly email. I’m sure there are many Canadians who don’t know what an RRSP or TFSA are but do you think those are things haven’t explained it to my clients? Don’t tell me that planners like to keep their clients in the dark.

    I will NEVER claim that absolutely everyone should use my services. In fact, I know that you and others who visit this site (and other financial sites) will not find value for money from my services. I’m OK with that, you aren’t my target market. There are some DIYers out there like your fictional Investor A. But the simple fact is MANY people (more than you think) do not want to take the time to pour over investment books like you and I do. Those are the people who benefit from my services because if a planner doesn’t approach them, they likely won’t do anything now and perhaps not for a long time.

    That is the basic bias in your argument. You believe that everyone is like you when it comes to getting enjoyment out of immersing yourself in the world of financial planning and investing, The fact is, it’s simply not true. I’ve been reading financial books since I was 15 (The Wealthy Barber might have actually been one of the first ones I read). It wasn’t until I really started talking to other people about it that I realized how little desire there is out there for people to do it themselves. That’s the same with many things in life, my brother is a mechanic and enjoys tinkering around, I on the other hand can’t be bothered to learn enough to change my own oil (and trust me, it’s not a matter of not HAVING the time to learn).

    Contrary to what you might think, I’m not here to solely defend Investors Group. When they announced the reductions in MERs I was cheering in my head (I didn’t think it would go over well if I cheered out loud at the meeting). Absolutely, your site (and others) offers great advice and I have no qualms with the vast majority of your posts. But I know there will never be a time when 100% of the people out there will take the time to get informed. Your opinion is that I’m taking advantage of them, my opinion is that I’m helping them. If I can help a client find an extra $100 month, you will focus on the $2.50 that IG takes, I will focus on the $97.50 that the client wouldn’t otherwise have.

    • Scott I’ll leave it to my readers to decide if a study whose massive revelation is that people who come to IG have investable assets, and that proves that IG is good is worth reading. For what it it’s worth to them, an impartial personal finance blogger believes it is bogus propaganda, and an IG adviser that will directly profit from it believes it to be true and valuable. I’ll let them make their own conclusions.

      Scott again you twist the basic math. If you play with the variables we could go and cherry pick all day. What happens if our hypothetical investor starts investing at 20, or waits until he is 75 to convert to more conservative investments? What happens if I plug in the average equities mutual fund return instead of using a charitable example?

      I understand the value of having a financial adviser to help get you past the 40% crashes and the emotional side of investing. I believe that with a decent amount of self-education people can overcome this (passive investing principles 101). HOWEVER, even if we say that is a large part of the value of a financial advisor, the fee-based model is still so superior to having a salesman recommend you products to throw your money into so that they can be compensated by commissions.

      Then you take issue with my investment returns math and use the highest inflation number possible, while inflating all the numbers that benefit your side of the argument, completely skewed math. I could present a conceivable argument that said the market would return 10.4% (it’s 200+ year average) and the average mutual fund would severely underperform this index, and then calculate in a MER of 2.8% (of which there are some at IG) and blatantly slant everything in my favour. Your just wrong man. Just allow my readers to see the basic math for what it is and decide if they think your value as an advisor corresponds to this.

      Then you ramble about how educated your clients are because you can explain basic acronyms to them (again, information they could get for FREE), I’m not really sure what that proves other than you can read and some of your clients are vulnerable.

      I admit that the bias in my argument is that people should become educated in basic personal finance matters. I believe it should be taught in schools, and I truly believe that no one cares about your money as much as you do. Certainly not people that are recommending investment vehicles based on commissions. I don’t believe that 99% of what a person needs to know for their personal finance matters is that difficult to figure out (which I’ve outlined before). For anything else, a fee-based financial advisor that a consumer can trust to be impartial is simply the superior option. It just is, there is really no debating this at this point.

      I appreciate the fact that you do credit sources like the Wealthy Barber and this site, and I really wonder why you don’t rid yourself of the IG umbrella altogether and set up shop under your own banner where you wouldn’t be burdened by having to recommend ridiculous investments that you can obviously see are not in the best interests of your clients. The bottom line is that if equity mutual funds didn’t compensate you or IG at all, you would never recommend them right?

    • I started following this thread because I posted my resume and got a reply from an IG recruiter. I was very excited being an old guy of 43 who has been around the block job wise. University educated and working in a variety of industries. I said hey maybe this is the way to go. My interview is this week. This blog depressed me, then at times gave me hope but over-all educated me of the up hill battle of this new career path. I realize it is gonna be quite a task building a client base to make this worth while. I am a pretty educated investor but even a quicker study and I have gotten a year of education via my hour of reading. This posting was a good send even though by now I’m quite late in the game as to when it started, but nevertheless it was extremely helpful insuring I didn’t walk into this interview as a sheep to slaughter.

      Teacher Man was making some good points but one of the Scotts nailed it to me on this post:

      “Sure, $138,000 looks big and scary, but those are dollars 35 years in the future. In today’s dollars, assuming 3% inflation, that difference is around $49,000, still a large number but that works out to $1,400 per year. Better yet, if I tell my client to invest $100 extra a month, that difference is eliminated. What does your typical hourly based fee planner charge, $150, $200, $250? I can tell you that between initial setup and implementation, ongoing monitoring, annual reviews, major life change events, etc, 10 hours per year isn’t unreasonable.” end quote

      The bottom line with professional services isn’t that you can’t do it yourself. It is that the majority of people won’t do it yourself. BTW ” DIY” I fully had to look that up on the urban dictionary. Anyway the reason I am actually going to this interview and not writing it off to another network marketing scheme, or Prime America pitch is because IG is the biggest bully in the yard. If I was charged with a criminal charge I could go to my buddy ‘ Paul Krumeh a pretty lousy Nigerian Lawyer in Toronto. He charges 200 bucks an hour and at the end of the day who knows what will happen. (FYI I’m of African descent so this is not a racial slur, Paul would suck if he was Irish or from Tibet) Or I can go to Harry Black, a well known criminal attorney who charges $400/hr. OR I could defend myself for free. Paul sucks but he is cheap and knows more than I do. Harry is expensive and I believe based on hype, propaganda, reputation, what ever you want to call it, he will more likely get me off. OR I can take matters into my own hands, read a criminal code some case law, Matlock and bring Teacher man with me and hope for the best. Sorry Teacher Man just busting your chops a little. All in good fun buddy. I have learned alot from you on this thread, seriously alot.

      You see where I’m going here. My hope is IG is the Harry Black scenario. My hope is that I’m not walking in and becoming the vacuum salesman of lousy funds and insurance policies. My hope is that I’m jumping on a winner who charges more but can produce. Yes some folks lost but from the time-line they lost when the whole world was losing. I want to be the wealth manager that makes his clients money but I more importantly want to make sure my family is fed. A teacher wants his students to pass but if they fail, he still wants his cheque. Well wish me luck guys, maybe I will say no, I will not pay anyone to work for them, a sucker is born everyday but not in my house. I hope its the opportunity I have been waiting for and I hope I can be the guy who someone blogs and says ” That guy saved my life”

      Fingers crossed.

      • I take no personal offence “Eyes Opened” I just honestly find your comment amusing. The quote you believe makes the difference is not really in it’s proper context, but that is beside the point. I’ll let that conversation speak for itself. I can’t decide if your lawyer comparison is just wrong and misguided, or mildy racist and more than a little weird. My point here isn’t that IG’s investment advisers are the $400 or the $200 lawyer, but the point is that none of the investment advisers are telling you how much they are charging upfront and consequently they are recommending terrible investments as a result of a ridiculous incentive-based commission system. Listen to guys like Preet Banjeree who used to be investment advisers tell you how rotten the industry is. IF you want to be a salesman for a living, watch Glengarry Glen Ross and sell real estate for a living. If you want to help people with their finances, peddling terrible investments to line your pockets with sales commissions is definitely not the way to do it. It’s pretty simple really.

      • Hello “Eyes Opened”

        You mentioned that you are University educated and have years of experience in a variety of industries…it sounds like you are very marketable. So why sell yourself short and work for a chop shop like IG? Why not approach more reputable institutions like the big banks instead?

        Just a thought.

  57. This was all very informative, thank you very much to the Scotts and Teacher Man and everyone else who participated. Does anyone know what investment group charges just flat fees for services and not MER’s? Thanks in advance!

  58. @CB
    I switched from IG to Scotia McCleod. They are fee based and it is charged quarterly. I am extremely satisfied with them and have actually begun to see traction in my portfolio, when te markets have been down. I would be happy to share te name oft advisor if you do desire

  59. Hello everyone,

    My name is Andrew and I am a financial advisor at National Bank. I just read this blog along with the many comments posted and I just wanted to clear a few things up.

    Yes it is true that you pay fees when investing in mutual funds at Investor’s Group. However, what most people on this tread either have not mentioned or do not know is that EVERY mutual fund has these fees, whether offered at IG, National Bank, through a broker or at any financial institution. MERs are a percentage fee taken from the returns in order to pay the fund managers and the financial institution offering the fund. It would be irrational to expect someone to invest money and manage it for you without receiving any form of compensation. What the advisor at IG meant when he said no fees is that there are no transaction fees. This is also true at banking institutions like National Bank and CIBC for example, because they sell mutual funds offered by their own company. Brokerage firms on the other hand, which can also be division of banks, usually charge a fee for EVERY TRANSACTION. They charge these fees because they sell investments of every time including singular stocks, and because they sell products from every financial company (therefore they don’t make profit from the investment themselves but rather the transactions to and from these funds. These fees can sometimes be up to 10$ per buy, sell or switch transaction, which can end up being quite costly. I did see however a mention of a trailer fee at IG from one of the posts. This would be a fee that some other institutions, like the National Bank, do not have. These fees are often due to the fact that companies like IG act like banks in the sense they don’t charge transaction fees, but they do not have their own mutual funds to sell so they have to contract with other financial institutions in order to sell theirs.

    Mutual funds were created so the everyday person that either did not have a good knowledge of the stock market or did not have the time to follow the financial situation as it unfolds day to day (which can be very time consuming) could still make investments in a diversified portfolio. A mutual fund is comprised of different types of investments like liquid investments (high interest savings accounts), bonds, mortgages and equity (stocks). What each mutual fund actually holds depends on the funds objectives, its desired risk and potential return level. When you invest in a mutual fund, you are actually investing in a fund that has an objective that corresponds to your investment objectives and that is run by a team lead by a fund manager. These people ensure the smooth running of the fund but also make some changes to the fund investments when necessary. The more the minimum purchase price of a fund, the more active management you will receive. For some funds with minimums of 100,000$ or even a million dollars, the managers will actively buy and sell in the fund in order to maximize profits. So the MER (% fee) is the price you are paying for the service of having your money managed by professionals. It is important to note that the MER of every fund is presented in the prospectus that must be presented to you at every account opening according to Canadian law. Also this fee is simply subtracted from the returns before the investor’s return is calculated. This means that when you receive your statement, the return on your investment you see there is actually the return you are receiving net of the MER (after the fee has already been subtracted). At the end of the day, mutual funds are without a doubt still the best option for everyday investors that do not have in depth knowledge of the financial markets.

    • This reply obviously not being for scott or teacher man who obviously know all of this, but more for the people who posted the first comments and might not be able to follow Scotts and Teacher mans conversation.

      PS IG MERs are above industry average. And the problem with IG is not that they have higher fees, but rather that they build their business model on sales numbers rather than on client needs. By hiring anyone and everyone who walks through the door and just throwing them into the sales without a base salary, they basically ensure that at least a percentage of their advisors will be incompetent, because even if they are good salesmen, they will always care first and foremost about how much a certain sale will bring in. Don’t get me wrong though, some IG advisors are great, some people with years of experience have moved to IG because they offer good compensation if you earn good sales. Moral of the story, make sure you do your research before choosing an Investor’s Group advisor

      • Hey again Andrew, I would argue that high fees are a pretty big problem as well. Just a 1% different in compounding over a 30 year horizon makes a massive difference to your overall wealth. I do agree with your criticisms and overall impression about many of the individuals who work at IG however (although to the Scotts’ credit, they are very persistent and knowledgeable about their sales pitch).

        I think the moral of the story is to stay away from financial advisers that are not fee-based!

    • Thanks for the clarification Andrew. You’re right that IG MERs are not unique (although at the time this article was written they were amongst the highest in Canada, which also effectively means the highest on the entire planet). I don’t want to get into this whole debate again, but I think I’ve pretty conclusively stated the case above in favour of passive investing, and the Scotts pretty avidly pointed out the benefits of mutual funds. I will never be convinced that the few benefits you get from mutual funds are worth anywhere near the cost of the average mutual fund MER. For 2 hours or less of reading, the average person could figure out passive investing and limiting transaction fees and slaughter the returns of over 90% of the mutual funds available in Canada long-term (and that is an extremely conservative prediction).

      For anyone that wants to read about mutual funds and compare them to passive investing please check out my eBook. Also note that I have yet to see a personal finance blogger out there who support the Canadian mutual fund industry in the least.

  60. I’ve been in the financial planning business for more than 33 years and reading some of the comments reinforced what I have thought for many years….people generally don’t have a clue as to what is important in achieving financial success. My God, if it was fees none of us would ever enter a bank, borrow for a vehicle or home or have a credit card! It is not any particular institution or advisor….all institutions have their strengths and weaknesses and if you look at the big picture, you will pay pretty much the same in fees, MER’s and other costs, all things considered. People love to hate huge successful companies like Investors Group, who by the way must have done something right for their client base or they wouldn’t be leading the industry. You can also purchase third party mutual funds through IG on their MRS platform with no sales charges. If you have a stock portfolio you can park it with IG at no cost and you do the buying and selling yourself with a direct line to the trading desk. You pay the same brokerage fee as with any other stock brokerage firm. (I know this because I like to know what my strongest competitors are doing! )We love to hate banks and insurance companies as well. The truth is it’s a competitive world and that’s good for us all. Pick an advisor or institution you are comfortable with, have them explain “Asset Allocation” to you, consistently put money away and leave it. The end result is a comfortable life.

    • I love how all of these financial advisers are advocating using MERs and using these ridiculous talking points to try and justify the industry.

      For anyone still reading this back and forth check out my eBook on why these ideas are bogus, but if you aren’t satisfied with that check out anything by John Bogle (the creator of Vanguard and one of Forbes 4 most influential investors), or Andrew Hallam, Rob Carrick, or anyone of the dozen best Canadian personal finance websites on the ‘net. We are all saying exactly the same thing – Canada’s mutual fund industry is ridiculous. We have nothing to gain by advocating low cost ETFs and index funds (I’m giving my book away for goodness sakes) so why would we lie? On the other hand, ask yourselves the motivation of the mutual fund industry.

      Pick an impartial advisor if you need the help, but even better, please take a few hours and do a little reading! No one cares about your money more than you do!

  61. Hello everyone,

    I’ve been visiting this blog from time to time and reading the comments since the beginning of 2009. Its a form of “entertainment” for me in a sense as it never seizes to amaze me how financially ignorant I used to be and how most people still are! Seriously, with blogs like these and thousands of other web pages and articles blatantly telling investors to avoid high MER’s and DSC’s (among other misleading and unethical practices), I simply can’t understand how Investment firms like Investors Group are still around.

    I used to be an IG client for many years until 2010. I made annual contributions to my RRSP over 8 years and the service was, personable at best. My adviser was a good friend and trusted he had my best interests at heart but that quickly faded when I learned about the fees only years later. You see, in the first year someone might invest $5,000 or $10,000 and a 2.7% MER might not look that bad on the bottom line. However when the RRSP adds up to $100,000+ (due to forced savings and not MF performance) the 2.7% MER is evidently detrimental to long term growth. Unfortunately most of us have gone through this painful experience of wasting valuable years in bad investments and it needs to stop.

    The information given here by Young, Teacher and others like them is very very valuable advice for everyone. IMO high MER/DSC financial consultants/advisors should be considered Mutual Fund sales representatives. Their sales training is the best in the industry and they will defend themselves and counter argue any challenging questions you may have. I mean they have an answer for everything whether good or bad. Right Scotts?

    Be careful folks. Take the time to understand everything about your money and where it is. You’ll never regret it

      • Hi I have been following this blog for quite a while and have found it very interesting and valuable. I think Scotts, Teacher Man and Young have all made very compelling arguments and I think all are correct depending on the circumstance. Teacher Man you are absolutely right, if someone wishes to DIY, buy low cost ETF’s trade them on their own, and manage their own affairs, I think the math is clear. Over a long period of time you just cannot justify the high MER’s. On the flip side though, as Scott has pointed out, many people just will not or can not do this themselves and you cannot underestimate this. I agree most people would be better off with a fee only planner but most people starting with a small account would be hesitant to go this route.

        I would like to share my own situation and perspective. I love investing, have read all the books, and could be a DIY. In fact I have my own online brokerage account where i trade my own small stock portfolio. My main portofolio is with an IG advisor. This is someone who I started with 12 years ago. The reason I went with him over other advisors I interviewed was mainly on how he handled himself in regards to my questions around fees and his compensation. I have pushed him hard over the years and have several 3rd party funds and investments and have never received any pushback. The advice he has given me has been good, including insurance, tax and estate.My net worth has grown considerably with him and my portfolio weathered 2008 very well. He was a godsend when my sister in law passed away and left 3 young children on their own. His help in setting up trusts for the kids, getting her estate finalized, ect was amazing. (and free of charge) In reality I know I could probably liquidate my holdings with him and set up a couch potato ETF and do just fine. But here is the rub, I have a wife and a family who are not capable of doing this. If I were to get hit by a bus they would be screwed. I trust my advisor will look after them. That piece of mind is worth a few percentage points to me any day. Again I appreciate this may not be for everyone and some say may be unwise, but I am content with my decision. Anyhow as I mentioned my portfolio is now large and I am currently in discussions with my advisor on how to lower my investment cost and as always I will hold him accountable and see how we make out. I think the reality may be if you dont need an investment advisor, educate yourself and should be fine. If you do, find a good one, educate yourself and hold him/her accountable. Thanks again for this great blog.

        • Thanks for the detailed comment Johnston, I appreciate your input! It sounds like you found a proverbial diamond in the rough. Just out of curiosity, if you were starting to invest today, would you be drawn to a fee-only advisor that showed all of their compensation up front and gave you a quote first? I agree that advisers can be very valuable, and I’m sure that as I grow my assets I’ll probably get some help around the edges myself, but I hate the idea of hidden compensation, and you have to admit that the vast majority of investors don’t have nearly the knowledge that you have, and would not be nearly as capable at choosing a proper advisor. I’m glad that a well-read dude like yourself is picking up something of value on this blog, and also glad that all of that typing that I and “The Scotts” (how great is it that they are now lumped together nicely?) did is not in vain!

          • Hi I think if I was starting all over as a young man again and did not have a lot of money to invest to start I would try something like the ING index funds.They are relatively cheap at 1.07% and they allow you to basically get a couch potato portfolio with little cash and you can contribute small amounts on a monthly basis. Plus they do the rebalancing for you. Once I grew my assets and became more confident I would determine if I wanted to DIY or use an advisor. If I went DIY I would probably liquidate the ING funds once my portfolio was big enough and then set up and ETF portfolio. I think however I would want to go the advisor route, especially with a family. I would then do what I did several years ago and look for the best advisor possible. I would definitely lean to fee only but wouldnt exclude commisioned advisors in my search. Again I am confident in holding my advisor accountable so I would try and find the best combination of fees and service. Back when I first started investing not only were there no ETF’s availabe there wasnt even an internet. I think the great thing about today is that there are so many products out there and so much info, including blogs like this, even the commisoned folks will have no choice but to provide good value. Thanks again and good luck on your investsments.

          • This sounds like a very practical path Johnston and I think great advice (although I would definitely due the TD Index Funds which have much lower MERs). I think you raise an absolutely great point about the access to information available today absolutely levelling the playing field. As far as my investments go, luck isn’t a big factor since I will happily take the market average all day long ;).

  62. I’m an IG client, and I’m very happy with the advise. They sit down and acually plan your investments based on your goals. Your dealing with one person and they give advise for the longevity of your investment, never has my advisor been pushy on investments or investment leveraging, they give advise and it’s always up to me to decide. As for service charges, there is none….. and DSC you do get charged if you pull out before 7 years but those charges go down every year. DSC is everywhere even at banks when you lock assets theres a charge to take it out before maturity. GIC,RRSP’s there meant for retirement when you are going to invest for 7 or more years and your not going to use the money till you retire, the MER’s are less on a DSC. The other choice is a No-Load, which means you can take your money out anytime with no charge, if you have a good advisor he will put your short term reserve and money you may need in a No-Load and your retire money in a DSC.

    Banks don’t care were your money goes as long as you invest. Has anyone had an employee of a bank sit down and acually make a plan for your future and show what you can do and how to invest for your retirment?

    Were there is an investment, there is MER. Whether your at a bank or any type of investment company MER’s are there. You think the person who created the mutual fund for the bank is doing it for free? The rate of return has the MER already taken off and those MER are there when you invest anywhere including banks.

    Anyway as you can see I’ve learnt allot from my advisor, and he watches my accounts so I don’t have to worry about any relocating money when the time is right. My money has grown more at IG then anywhere and they do everything for you…… estate planning, life insurance, no charge checking accounts, morgages and on.

    Oh and a mutual fund is a pool of investments with a number of different invesments inside of it, so a mutual fund is the idea of diversification. you put all your money into a mutaul fund and it’s invested in many diferent area’s. The idea is if one of the funds inside drops then you only loose a small percentage but if other funds go up it will equal it out or even rise.

    Hope this helps for all that want to invest wisely and with the right people.

    • I really want to know what kind of kool-aid they serve at presentations. Did you even bother to read the article before writing this comment?

      I’ll be brief and just point out the factually wrong things that I’m sure you were told:
      -DSC is NOT everywhere!!! Please read my ETF book for details
      -I agree that no loads are better, but to paint it as the only choice is ridiculous
      -Banks don’t care as long as you invest but commission-based mutual fund salesman do?
      -Your MER comments are ridiculous. Please refer to my book or any of the comments above. MERs can be a huge drag on investment returns. That’s just a fact.
      -Mutual funds can be diversified, but most of the time most people own way too many mutual funds that just own the same companies over and over again. Also ETFs give you much more efficient diversification for a much cheaper price. Don’t let anyone tell you different.

      Clearly your adviser had a lot to say, not sure if you learnt “allot” or much at all though.

  63. I to was a customer of IG , dealing with compliance department as we speak . I think your readers would be in shock when my experience is told , as for their advisors sham on you.

  64. Ok hang on to your wallets. Feb 2009 met with ig advisor for the purpose to discuss my wife and i drawing down our rsp,s monthly before we hit 65. His suggestion was to leverage 200 thousand to invest and us our rsp,s to pay the loan thus we would not pay tax on monthly redemption and only pay capital gain on the huge upside we were going to make on the 200.Sounds like a (PLAN). We transfered in some of our rsp,s and the ball was rolling. A little background, we had sold a bussiness on a share sale 2 years earlier and invested some on a monthly income fund elsewhere which is our paycheck, the way the fund is structured is very tax efficient allowing our accountant to give us yearly dividends of a substantial amount with very little tax. At the advice of IG advisor we bought dsc series funds he said that was best for us( LIAR ) . In dec 2011 we cashed the leverage account and payed 12 thousand in fees and payed the loan out. When this fantastic investment was over we had paid 20 thousand in interest to solutions bank, indirectly owned by IG out of rsp,s . We cashed in at 232 thousand so the interest and fees had taken the 32 thousand above the loan payment.Over the period we owned it , there was tax on capital gains tax on rsp withdrawal , not the golden investment we had been talked into.Our accountant told us just to withdraw the monthly from our rsp,s andthe tax will be minut, should have talked to him first.Oh but were not done yet , the rsp,s we put with IG IN 09 in there b series no dsc funds , 80 thousand of them had been moved to dsc funds by mister advisor . We found this out in July 2012 when we moved them to a real financial planer. So our option was to contact there compliance department in Manitoba by MAIL , i thought this was 2012. So me being me made up signs that said INVESTORS GROUP SHAME ON U and drove to their office and picketed the place, yes my wife and I were pissed off bad!!! Well down comes mister division director and says he wants me to come in his office and do a conference call with the manager of compliance in Manitoba, oh no snail mail guess we got there attention A. So we continued picketing for several more days much to there dismay. Then we got a response from compliance offering us 4 thousand they took in fees on our rsp,s. along with a gag order that has to be signed and notorized by us and we are not allowed to discuss any part of this again. That to me takes the cake. In the time we were picketing we had dozens and dozens and dozens of people stop listen and then tell us there horror stories of dealing with IG. So at this time we are filing a complaint with the MFDA ( mutual fund dealers association) which holds them accountable for their actions also the ombudsman in charge of financial institutions. In light of all the people who approached us and told their stories you dont have a snowballs chance in !!!! of telling me its a good company,and they can JOKE on their gag order. Thankyou for the opportunity to vent.Oh and this is WITHOUT PREJUDICE.

    • I’d say it’s with a little bit of DESERVED prejudice eh Screwed? They recommended leverage to the max in order to throw into high MER mutual funds, who would have guessed? Picketed the office? That’s classic! Thanks for sharing your negative experience on behalf of our readers.

      • It’s sad that you thank one person for a negative experience yet when others post positive experiences with IG you reply with “I really want to know what kind of kool-aid they serve at presentations.” You clearly only want your readers to share the same negative feelings you do rather than be open to the idea that IG does help many Canadians.

        • There is probably some merit to what you mention there Scott, I am obviously slightly bias on this issue. I would like to point out though I’ve published everything that everyone has written, regardless of what viewpoint it has been from.

    • @Screwed
      Go brother…let me cheer you on. You got what I did not. Barring the picketing, I did almost everything possible to get my DSC back. That compliance thing they have in Winnipeg is a _____. This whole way of doing business sucks. In the year that I have moved from IG, I have made up my losses.
      And BTW was your advisor a chap with initials GG? This guy was a salesman, not an advisor.

      • This is a consultant problem not a company problem.. why does everyone blame the company and not hold the consultant accountable. Its like going to Walmart and getting double charged for something by a clerk, then leaving and realizing and then just freaking out and telling everyone about it instead of going back and seeing if you can talk to management about it. If you go to the lower people, they may say that they cant refund you because there is no proof. But if you go higher up then they may end up refunding you to keep you as a customer. So was this a clerk problem or a company problem??? Obviously a clerk problem, and a customer problem because you didn’t check your receipt before you left.

        So this may be confusing, but its to show that there are bad people in every company. Do your research. Hold yourself accountable. Did you know you can move money “in-kind”? and it wouldnt have taken much research to find that out. So everyone panicked and moved money and didnt bother to find out the most efficient way to do it??? hmmm.. is it just the advisors fault or could the client have done a bit more research and maybe went to the right channels for the proper answers

        if you know what your talking about and know what the real complaint is then most companies are willing to work with you..

        • Nope, terrible analogy. At Wal-Mart prices are displayed for you to consider before buying. Very transparent and a very easy consumer contract to understand. The exact opposite of the current mutual fund-pushing model.

        • If your an advisor then you should have tried to transfer accounts from IG for customers before. IG has this figured out and everyone I talked to in the industry knows you can not transfer IG mutual funds in kind 90% of the time. In our accounts there were 2 fund that could be and of course they had a measley thousand bucks in them.Every where we went td,bmo,royal bank , private firms were all aware of this before we showed them our portfolio,s . As far as the advisor being bad you are correct every industry has morons, BUT mfda rule states the company MUST have policies and procedures to detect conflicts from branch to head office. Trades of 5 thousand and more should be looked at by branch management, more than 5 trades a month should be looked at. In our case he took one and a half year old money and moved it into dsc funds, he did 7 trades in one day in my wifes and 4 in mine, one trade in mine was 19 year old money , so where was the branch management and head office management. I again will say this is why they immediately offered our money back. To sweep this under the carpet and did I mention i have to sign a gag order never to discuss this again ,what kind of crap is this , i thought we lived in Canada.

          • The reason you can’t transfer out IG funds is because the planning advice you receive is built into the MER and if you go to another institution you wouldn’t be receiving that advice.

            What your consultant did was wrong, that’s why compliance immediately gave your money back, that shows the system is working. Branch managers are not able to thoroughly investigate every trade, can you imagine how much time it would take to phone every single client and ask them if this is exactly what they wanted to do? Branch managers look for obvious errors but a dishonest consultant could initially get a trade through that is overruled down the road by compliance (as in your case).

  65. I was waiting for a rebuttle from some of these upstanding IG advisors. What this advisor did in our rrs,p portfolio,s was called CHURNING he made a trade in our account that had little or no benefit to us but got him a 4 grand pay cheque, this is noted in the mfda rules and regulations section 2.1.1 mr-0065 and is totally against the rules. As i said the number of people that have told me their stories I would say the score would be IG 2% Screwed 98%.I would like nothing more than to have 500 people picket one of their offices ( I will make the signs ) , maybe CBC Marketplace or 16-9 would go and put these guys on the hot seat.

    • Not a bad idea with a little marketplace attention. I should mention though Screwed that I honestly believe it’s an industry-wide thing and not unique to Investor’s Group.

    • Please let me know if you are seriously considering picketing one of IG’s offices with a large group of unhappy (screwed) investors. My wife and I will happily march around all day! I think these people are real crooks and I know my former consultant (RC) should have been a used car salesman (instead of a mutual fund salesman posing as a financial advisor).

    • Im not an IG consultant, but I am a consultant. i find it frustrating that you make assumptions. Negative comments travel way faster then positive ones. That is a known fact. And I am sure if you had your proper statistics, that you would not be lying or assuming on the internet because of your experience.

      like i said .. it always comes down to the consultant and the consumer… NOT the companies you choose to deal with??? what is so confusing about this.

    • Actually, moving from no load to DSC funds is not churning because the client does benefit from the lower MER. Churning would be taking DSC funds that had expired (i.e., been there for more than 8 years) and re-investing them in such a way that it triggered a new DSC schedule.

      I’m not saying what he did was right, but it’s not, by definition, churning.

      How many people have told you their stories? I could drum up 1,000s of people who have positive experience with IG and that’s only from my region of 35 consultants. There are 4,600 consultants across Canada so you could probably find hundreds of thousands with positive experiences.

  66. I retired about 18 months ago and invested my pension payout with Investors Group. Our ‘financial consultant’ promised us a 5 or 6% annual return, even though I thought he was being too optimistic. This all happened just before the last market meltdown (2011). I told him that I had a strong feeling that the stock market was about to crash but he assured me he had spoken to his top ‘experts’ in head office and NOW was the time to invest, otherwise I would miss out on some big gains; besides, I should trust his advice since I was paying him for his ‘professional’ services. Well, that was one of the biggest mistakes I’ve ever made! Within 2 months I had lost over $60,000 by letting him invest my hard-earned money!
    I filed a complaint with their compliance department but they sided with my consultant (they also work for Investors Group). He is still under investigation by the MFDA. I also found out that he had stuck almost all of my money in DSC funds and that if I want to transfer my remaining money out to another institution, I will have the pleasure of paying Investors Group a 5.5% penalty on the balance of my portfolio. Also note that I did not receive a prospectus until AFTER I was fully invested and when I asked for a copy of the booklet (probably a prospectus) that my consultant was referencing before I invested, he told me it was proprietary information.
    Is Investors Group legit or just some kind of a huge pyramid scheme? I am seriously nervous about this.
    Is it better for me to pay the DSC and get out of there, rather than wait out the penalty? (BTW – their mutual funds have high MERs and lousy returns)
    Thanks

    • 5.5% DSC PENATLY! Wow… how is that legal? Proprietary information? Really? Man I’m so sorry to hear this. Thank you sir/ma’am for sharing your experience and allowing us to learn from it.

    • Zig , it sounds like you have a sizable amount of money to take out of IG, I have an idea for you . The company i transferred our rrsp,s to said they would by dsc funds and as they would get the big upfront payday, they would refund the entire amount to me thus i would have lost nothing. Your money will still be tied up in dsc but if you have a proper advisor this won,t be a problem as he will be working in your best interest and when the clock ticks down he will invest in no dsc funds. You should be able to find a company that will do this because this is truly in your best interest good luck.

    • #1) they should have disclosed the DSC and had you sign an agreement
      #2) depending on the size of your porfolio 60000 is a big loss and you are possibly in to high of a risk category, which you should have completed a questionairre to determine if this was appropriate for you.
      #3) DSC funds allow you to hold a fund with a lower MER.. So the 5.5% decreases over time and it is meant for long term money that will be sitting there so that you get more compounded growth (a discount for agreeing to stay with company long term)
      #4) If you are unhappy, you can move your money “in-kind” to another institution without penalty
      #5) IG is not a pyramid scheme
      #6).. this sounds like a consultant problem, not an IG problem.
      #7) research, research, research. It is consumers like this that have a bad experience who make every consultant out there who is doing a good job and doing what is right for their clients seem bad. And that is soooo wrong

      • Saddened,

        1) I recently learned that this actually started five years ago, before I even knew what ‘DSC’ meant…I started dealing with this so-called ‘consultant’ (Ron) when I ‘inherited’ him after my previous consultant retired. While closely looking over my statements after realizing that I’d been taken advantage of (early 2012), I realized that Ron had taken ‘old’ money that I’d had with IG for many years (no DSC) and stuck it into a DSC portfolio. HE DID NOT mention anything about this to us, only that we were going to get far better returns under his ‘expert’ management.

        2) According to our (now former) advisor, we were placed into conservative to moderate conservative investment categories. Yeah, a losing year on the markets really gets amplified when the fund company (IG) takes their 2.5 to 3% cut, even though they did nothing but lose money for us. Man, I wish I could find a high paying job that even rewards me for poor performance!

        3) Yes, the DSC funds are offerred at a great discount and certainly present us with a wonderful opportunity to save lots of money and enjoy compounded growth (Sarcasm). I can’t believe this because I am not on herion…
        As an example:
        IG Alto Moderate Portfolio A (DSC) MER = 2.64% ,
        vs IG Alto Moderate Portfolio B (NL) MER = 2.74% ,

        I am not Einstein, but to me it looks like the miniscule fractional savings only amount to about $100 anually per $100,000 invested, whereas the DSC (which starts at 5.5% for the first 2 years) can set you back $5,500 if you have to take the money out early. Do you believe that saving $100 is worth taking a $5,500 risk? If so, come down to Niagara and check out our casinos.By the way, the ‘compounded growth’ was all negative.

        4) I’ve spoken to two other institutions and no, I cannot transfer funds “in kind” from Investors Group, since they are propprietary.

        5) How can you be sure? Bernie Madoff had tens of thousands of people believing in him for many years.

        6) I had hoped that it was only a consultant problem, but their compliance dept. responded saying that he had done nothing wrong and that they support his methods. To me this indicates that this must be IG’s business model.

        7) I used to work up to 60 hrs/wk and attend university while working (about another 30 hrs/wk) before retiring. If I’d had the time to “research, research, research” as you suggest, then I wouldn’t have needed an advisor to look after my investments. I thought they were supposed to do the research?

        I am usually opposed to government intervening in the public’s affairs, but in the case of the mutual fund industry and financial services in general, I think we need more regulation. If the fund companies could keep their sales people in line with commonly held ethical standards, then we wouldn’t have the ‘wild west’ mentality that we currently witness. It is a sad situation.

        • Zig, Your new consultant is in violation , as mine of rule 3 , specifically notice mr-0065 churning also switching . These rules on the mfda website are very user friendly , for the lamen to understand plain english, your advisor should have got you to sign a client consent form for the actions you mentioned also given you a disclosure form which mfda suggests they get signed. It also states that even with these 2 things done , it does not defend them if the trades were not in the clients best interest and the obvious reason was for him to make money. It even uses your situation as an example of wrong doing. Since I telephoned compliance and quoted several violations of rule that even they had broken and told them I was putting together a substantial complaint to obsi and mfda and was now very familiar with the rules they ignore, they are so accomodating it makes me puke.They ask you for all the info you have so they can determine what little you actually know about the rules they have broken. I see you mentioned the falls was from Brantford myself, now okanogan bc. Keep slaming them , they just want you to go away.

          • Thanks Screwed,
            Compliance has been using amateurish stalling tactics with me, just like my former consultant had.
            The MFDA rules provide some interesting reading. I have sent compliance an email throwing these rules at them.
            I am editing my complaint files to reflect these violations by my former consultant and submitting to OBSI this week.

    • One more thing.. All funds and their prospectus can be found on the internet. search funds. All funds are legally disclosed and their information. Like I said.. do your own research research research. Your consultants should know this information. and if they dont, then go to another one until you find the right one. Shop around. and then when you find a good one, stick with them. and noone can guarantee rates of return, it is illegal. If there was some magic secret that could guarantee you amazing gains, then wouldnt more people be richer then they are.

  67. Zig from screwed. You can complain to obsi ( ombudsman) @ 1-888-451-4519 i think this is phone number or google them . Mfda can not award you restitution but obsi can. You must complain to them by 6 months from compliance answer to yor complaint.It sounds like were talking about a serious amount of coin, BASTARDS.I have been studying mfda rules and regulation on their website for 2 weeks now very interesting. The compliance department phoned me wondering why I hadn,t taken their offer of dsc refund and signed GAG order with witness. I told them what I had been doing with 150 hrs of my time in the last 2 weeks and was putting together a substantial complaint to the mfda and obsi and was not interested in their halfassed atempt to quite me.When i started quoting several sections of mfda rule and the instences that their snake oil salesman and even themselves had violated she said she would be more than happy to reopen my file. I suggested to her that she first finish the intial investigation and answer the 80 percent of my concerns she ignored contrary to mfda rule she is obligated to fully investigate all complaints verbal or written . First rule i caught her breaking . Dont give up man spend the time and i am sure you to can beat them with the rules they ignore.

    • Hi Screwed,

      I hope you put a good fear into them! You should also add the 150 hrs of your time to your settlement demand…
      Thanks for the words of encouragement. I will be sending a formal complaint to OBSI next Monday; MFDA is moving very slowly (still in initial stages after 3.5 months).
      I replied to compliance and told them I would make my fight public; they said they would send a reply ‘shortly’ but so far no word after a week.
      I’m starting to make arrangements to transfer out of IG.

  68. Its is quite sad the responses to this post, the fact is that ALMOST all of the “horror” stories on here are as a result of ignorance on the clients part. I hate to tell you but every mutual fund has an MER, regardless of the fund company, and these MERS are what pays for the management of the funds, and the advice and guidance of your consultant whether it be with IG, a bank, or anywhere else. Almost everything stated in the article is false and twisted, and the author hasn’t got a clue what he’s talking about.
    I hate to tell you, but its finding the right advisor that is the important part, all advisors have access to similar products, its the advice and the planning that makes the difference.

    Most of these “FEES” that people are talking about, are ignorance on their part, Investors Group is not the only company that uses a DSC fee schedule, and they have no load funds as well for every fund, so it should never be an issue if clients pay attention to what their advisor tells them, I have a feeling that a lot of people here are also confusing the “tax” that they are paying for withdrawing from there RSP’s early for fees. Some people just dont understand no matter how much you tell them.

    I would like you all to take a moment to think about something. There is a lot on here about MER’s and how they are “taking” your money. So what you are all saying is that you expect to invest in a mutual fund, which is a managed pool of money and assets, and you expect to have that managed for free? and you expect the advice and service from your advisor to be free as well? So he shouldn’t get paid then? Try telling you doctor that.

    A few more quick notes.

    You cant churn a mutual fund at Investors group, there are no trade fees for mutual fund… you clearly dont know what your talking about.

    If you want free open a self directed account, invest in stocks and ETF’s, good luck managing your own portfolio and diversifying, im sure you know much more than the experts that have been managing funds for years as a full time job

    Consultants legally CANNOT “promise” a return, that is one thing that is 100% NOT OK, but once again, this is not by any means local to Investors Group, this happens everywhere

    There are many problems with Investors Group, as well as other Investment companies all over Canda, but I have to say a lot of the crap in this original post and the replies is completely bogus, as an advisor who has seen many different sides of the industry, there are pros and cons everywhere, between companies and different advisor styles, fee based and commission based, its simply a matter of preference.

    • Chris, please read several comments before you make the same argument. Here has been my consistent position from day 1, along with a few things your argument fails to address:

      1) IG has somehow become a symbol in this argument which is really more a discussion about the mutual fund industry in general. You’re right about there being MER fees on all mutual funds, however they are MUCH lower through the TD E-series funds for example. This adds up quickly when compounded.

      2) The question boils down to if advice and planning (which can be 98% covered with a couple hours of reading for most people) are worth the huge compounded losses MER funds produce.

      3) Guess what products will not have any DSC funds? E-Series and ETFs.

      4) Last time I checked doctors didn’t hide their fee tables, they are very similar to fee-based planners… which I suggest.

      5) I will definitely diversify my investments on my own, and it isn’t that hard to do. Read the free eBook man, I truly believe I could teach most 16 year olds the basics of asset allocation and easy diversification. Not that hard. John Bogle has shown time and again that the vast majority of mutual fund advisers will not beat the market, it IS that simple.

      6) Go figure, you’re an adviser, who would have guessed?!!

      The advisers before you were much more eloquent in creating reasons why their services were necessary and justified high MERs btw.

      • Mutual Fund Advisors are not trained to “beat” the market??
        They are there for those people who do not want to do it on their own.
        So apparently, from what you are saying, every consultant in every industry is overpaid, because really.. you can read up and learn on your own. Well you can do that for every area of life.

        Advisors are there for a reason. An industry exists, because not everyone wants to do their own research. And also with proper planners there are benefits because of tax, estate, risk management.

        But if you want to do all your own research fine. But why knock the industry that people choose to use.. Obviously a lot of these people dont even do the research to understand what their complaint is, why would they do constant research for accounts regularily. The research that is happening now could have been avoided if they would have researched what to be aware of before they even chose a consultant.

        But yet the companies get blamed now!

        • Again, you falsely represent the parallels between other industries and the current commission-based model in Canada. If financial advisers simply gave quotes and were all fee-based (which would allow for a much more efficient market) I would whole-heartedly agree. There is just simply no less honest compensation system than the one in this industry and all of the negative firsthand testimonials on this comment board show that.

          • So, your opinion that a few dissatisfied customers is a reflection on an entire company. How many people have expressed negative opinions about their IG consultant here, 10, 20? There are over 4,600 IG consultants, I can guarantee there are a few bad apples in that group but to tarnish the whole company because of them is silly. Can you name any industry that has perfect employees across the board?

            How is saddened falsely representing the parallels between other industries? Investors Group is about holistic financial planning which includes tax planning, estate planning, risk management (insurance). You are the one that is creating the false comparison when you compare IG MER to an ETF MER. When was the last time your ETF company helped you with cash flow planning or any of the previously mentioned services?

            I was a client for 10+ years and I believed in what the company does so much that when the opportunity arose I decided to become a Consultant.

            I can think of many less honest compensation systems, for starters anyone who is paid by the taxpayer (including teachers). I have NO choice but to pay my taxes whether or not I want every “service” they offer.

            All of my clients know exactly how I get paid and, if they choose DSC funds they sign a statement that clearly shows the penalty for withdrawing before the DSC fees have expired. My median client has around $30K in assets, that means they are paying between $500-700 per year in fees (MERs on fixed income funds aren’t 2%+). Do you know how much a fee only planner charges, it can easily hit $3,000-$4,000 for an initial plan, so no I don’t feel bad about “locking in” my clients.

          • Again, your comparison to teacher compensation is ridiculous Scott. My salary and all benefits are completely public. You can read my entire contract online in plain speak if you want, there is even a handy salary grid if that is all you really want to know. Absolutely anyone has the ability to vote for representation that will lower my salary (see Wisconsin’s case). There aren’t many compensation systems that are more veiled. Go ahead and show anyone the sacrificed returns they are losing out on and they are shocked because this is rarely ever shown to them properly.

            If those compensation numbers you discussed are correct, and you aren’t getting any bonuses, or money for recommending insurance products, and IG doesn’t charge the person any other fees, then the comparison makes sense. If that is the case (highly unlikely) then why in the world wouldn’t you go to the more transparent fee-only planning model? Also, $2,000-$2,500 is the common average from what the research I’ve done, and what Moneysense magazine claims. That’s fro the initial plan, and then $200-$300 per year after that (you can see how that equals out pretty fast).

    • Chris,

      I will take a moment to recount my own experience with my (former) IG ‘financial consultant’ as it applies to your comments…

      1) My IG advisor did NOT tell me that we were elligible to invest in no-load funds, in fact he was not at all clear about how he was being paid or about the implications of DSC funds; in fact he put all of his clients into them automatically (admitted to it after the fact).

      2) I know the difference between taxes and fees. I was drawing on my unregistered account.

      3) In exchange for paying for the ‘advice and service’ of my advisor, I was given a $50,000 loss for YE 2011. In addition, I will be charged approx $30,000 DSC to take my remaining assests to another financial institution. Honestly man, do you think this is worth paying for???? REALLY?????

      4) My IG advisor DID promise me a + 5 to 6% return. He delivered a stunning LOSS instead…

      5) I ASSURE YOU the original post is certainly not crap and that none of my replies are bogus. This is a REAL loss delivered to me by a con man masquerading as a financial advisor and I am stuck living with it!

      Hey Chris,

      Wake up to the real world

      • This is obviously a consultant problem, not a IG problem. And if you are right as a consumer, then you will win your case most likely.

      • oh and you wont be charged anything to move to another institution, if you move it “in-kind”.. and promises of return are illegal. Why would you want your advisor to do something illegal. You want promises??? Obviously you havent done your research and you are complaining when you dont know all the rules. Maybe he did do you wrong. But now you know it is illegal and that would be my first warning sign if I was picking a bad consultant. If he made promises for what he could get me, I would run the other direction. He obviously would be dishonest and willing to say what he could to get me as a client..I would rather experience some losses and trust that my consultant had me where I needed to be.

    • So your an advisor, well maybe you should get out the mfda rules and study them again. Try rule 3 in the notices section mr-0065. Churning, when an advisor makes a trade in an account that has little or no benefit to the client , but benefits the advisor. Our advisor did exactly that , we gained having our money tied up for years , he got the big instant pay day. Probably why they offered me my money back immediately ,YU THINK . As far as being ignorant you are correct , that is why we go to the so called experts and expect to be treated honestly and fairly and sure dont mind paying for real honest service. I owned an autobody collision shop for 25 years and I will tell you for sure I could wambousel you on a repair to your car in a heartbeat how could you know what I know, and if you brought your car to me for a repair , would you take the decades it would take to learn or would you expect to be treated fairly and pay a fair price with no false add ons. My customer satisfaction and retention was always in the high 90% this speaks for itself . What do you think IG,s numbers would be.

      • It saddens me to see that you are blaming IG for your consultants unprofessionalism. Actually, client retention is very high for consultants within any organization who treat their clients right and give proper advise. There is a legal obligation for full fee disclosure at all times with all companies and if as a client you are not doing your own research, then some of the blame must lie with yourself. You would not go to a dentist who did not know what they were doing, but sadly there are some who are not very good and do a terrible job. I have seen people get screwed through all associations. So I have to ask “was it your consultant or the company that screwed you?” and I think more research needs to be done on consumers parts when choosing a consultant. And look up and make yourself aware of things to be aware of. I am a consultant and I will not disclose who I work for because these are my words not the company i work for. But it is sad to see how real the fact is that a negative comment travels way faster then a positive one. Within my organization I have seen consultants with successful client retention for generations. And I have seen and dealt with accounts that were not set up properly. But I have also seen this in all companies. And I have also seen people make their own mistakes and loose plenty of money on their own making decisions that they didnt research. If you cant even research and check into the professional you are going to use, then what makes people think that they are going to make the right decision when it comes to the thousands of funds and businesses/stocks.

        If you are willing to research and investigate on your own time and are confident with your decisions than great. But advisors are there for people who do not have the time or will to do it on their own. I am not niave enough to think that I am a doctor, and I dont want to learn to be one… which means I need one. So when I picked one out, I took my time and asked for some referrals. and It is too bad that this negative situation has happened. and it is wrong to not have full disclusure from a company. But I have found that sometimes, because people dont understand and do the proper research, they end up with a bad advisor (with any company) So I feel it is innappropriate to identify a particular company, when really the problem was the consultant.

        • I believe the high client retention rates are directly proportional to the lack of financial literacy in Canada. If no one truly understands the compensation model or the systemic under performance mutual funds versus the overall market, then no one will wake up and take control of their financial well being. You don’t need to make the “right decision when it comes to thousands of funds and businesses/stocks,” you simply need to do “average” and you will beat almost every mutual fund out there. It’s scientifically proven. Just Google “Dalbar mutual fund study”.

      • Once again, to reiterate what others have said over and over again, it is impossible to churn money at IG, there would be no benefit whatsoever to the consultant, once you are in a DCS fund you can move in and out of any other IG fund you like without changing the DCS schedule. Even if the assets are matured assets, in “C” funds, it is impossible to take those and re-set the DSC schedule and get paid again.

  69. Also churning is exactly as you say “Churning, when an advisor makes a trade in an account that has little or no benefit to the client , but benefits the advisor”. But from my understanding with institutions like IG or Edward Jones or Sunlife. You do not get charged for funds moving. So churning in one of these institutions would have to be to move from a DSC fund with matured units and taking those matured units and putting them into another DSC fund with a brand new schedule. Other than that, it is brokers that are more commonly known for “churning” because with financial institutions they are more regulated and because they dont charge for individual transactions (like a front end load, or initial sales charge) it is almost impossible to do unless your client has been with a consultant for more than 8 years which opens the door for that to happen.

    A consultant gets paid on a DSC, in one lump sum because you are committing to 8 years before withdrawal. The MER is lower in these accounts. Or you can go into a NL which has a higher MER. and the consultant gets paid over time. BUT there needs to be full disclosure and you as a consumer need to be the one to make that decision. Basically the company gives you a discount for staying the long term.. which is the whole purpose of “long-term” savings. and even in a DSC, there is an amount you can take out every year without fees. But if it is meant for long term. I would rather have the discount and service. But i would research my consultant first. and feel it out. All initial meeting with each company is complimentary and there is no rule against meeting with them all.

    • Saddened, FYI investors group doesn’t accept any transfer in kind request for a client that has signed with IG since July 2006, so when you say that people didn’t research properly, I think you’re the one who doesn’t have his facts straight…and this is only at investors group

      • You are partially right, it is not that they dont accept in kind transfer requests, it is that IG has cleverly set up there funds so that they cannot be held anywhere but investors group, (which is a simple way to put it, i know there is a lot more to it than that so lets not pick apart the technicalities)
        Brokers can hold IG funds though from my understanding, just the same as Investors Group IGSI can hold non-IG funds, (Something that many clients arent told, because the consultant doesnt get paid on them)

        I understand what a lot of you are saying on here, and I really dont want to keep posting here because it is frusturating for good advisors to deal with arguments like this, where facts are twisted and bent and are usually the result of a misunderstanding and bad representation on behalf of the client. The truth is there are good advisors and bad advisors, and I would reccomend staying away from any advisor who has a practiced sales pitch. Financial planning isnt about how high MERs are whos products are better, if thats your main concern, then open a self directed account and do as teacher man says, do the research yourself, and give yourself a basic understanding of finance. I will agree with him on one thing, there is a serious lack of financial understanding in this country. However, for those who dont want to think about there finances and plan, and want it taken care of, IG is a good a choice as any, because really it comes down to the advisor, a good advisor doesnt get questions and complaints about MERs, just as I never have, because he provides full planning and proper service to his clients. That is how they justify the slightly higher MERs, which I might point out have recently been lowered (theyre still high, but slightly more competitive,)
        A good advisor will save you more in tax each year and in retirement, that MER wont matter as much, there are good years and bad years for the market, and investing isnt always about out-performing a market, because in most cases, a portfolio wont, however, a good portfolio may underperform the market in up times, but will not tank with the market in periods of market loss.

        I would like to here how negative returns compound, since this has been referenced several times. Since you own “units: of a mutual fund, and you can not “lose” those units, how do losses compound from negative returns? You can gain more units from income being reinvested (therefore buying more units) but how can your losses compound? In fact, in periods of market downturn, my clients come out further ahead, since they are buying units at a discounted rate, when markets correct they now own more units, therefore giving them a better return and earning them more dividends and income in the future. If an advisor rebalances properly, and can keep there clients in the markets in a market downturn, they should come out further ahead. It is the people who pull there money out when the markets tank, ( and a suspect that is what a lot of people on this thread may have done, but ive been wrong before) that will always lose money, and belong in a GIC (or risk tolerance equivilant) at a bank.

        Someone told me to “wake up to the real world”, which although I find it unnessarily insulting, I find it much more humorous. Thank you for the advice, I will drink some coffee and let you know if it helps. Seriously though, I do live in the real world, and I am quite aware of the pros and cons of our current mutual fund structure and the stricture at IG, you were screwed, there is no doubt about that, but what I have been saying this whole time is that it is a problem with misrepresentation on behalf of your advisor, and to blame IG for all your problems is making you look foolish, accept some responsibility for not doing your research beforehand and getting fooled by a flashy sales routine, stop blaming everyone else at IG for your problems. If everything you said is true, you would have no problem winning a legal battle against your advisor.

        Teacher Man, I really dont care how eloquent my replies are, I have never had to “justify” my services before and I am not going to now, my service to my clients has always spoken for itself, and I work hard to keep my clients satisfied and put there needs first, but I have no problem defending others, because what you are doing here is respresenting every advisor that works for Investors Group as being bad, which is untrue. If this thread is not meant to be about IG and instead about mutual funds and dealers in general, than stop referencing IG. In the case I would in fact have to agree with you on many things, as I do believe that under all the complaints here there was a good hidden message, but it has been completely shadowed and lost.

        Losses are only realized when you take the money out of the fund, if your at such a loss, I would reccomend taking a look at how the market is doing in general, weigh that against how your portfolio is doing, rebalance if needed then do what a lot of smart investors do and wait for markets to recover, if you pull your money out in cash, as so many do, I can guarentee you WILL lose money.

        Im sure someone will have a witty comment about MFDA regulations and fees and compare it to diy investing, but I will close here, if your main concern is fees and MERs and your the type of person who will pull there money out if it goes down, then self invest, hell, buy this guys book, because you will never be happy at IG or with most advisors for that matter, if your the type of person who doesnt want to have to learn about investing and actively manage your portfolio, then do your research and dont pick a company, pick an advisor, and pick one that discloses everything upfront, doesnt promise anything, except to act in your best interests and do what is right for you.

        “screwed”, if your looking for promises, I hear GICs are promising about 1.5%, (or about -1.5% after inflation), maybe you should look into those.

        • Its seems that I have written a reply longer than the original article, which makes me realize how much time I have wasted on this, I do however hope I get my point across to anyone who reads this thread, my appologies to anyone I may have offended, except those who tried to belittle my posts, in those cases, I hope you wake up and smell the real world.

        • Again for brevity purposes I’ll respond to your misleading statements in point form:

          1) “Slightly higher MERs” If you consider MERs that are 40X or 4000% higher on basic S&P 500 funds to be “slightly higher” then I guess our definitions of “slight” are different.

          2) “A good advisor will save you more in tax each year and in retirement, that MER wont matter as much, there are good years and bad years for the market, and investing isn’t always about out-performing a market, because in most cases, a portfolio wont, however, a good portfolio may underperform the market in up times, but will not tank with the market in periods of market loss.”

          -As I showed in the above conversation with the IG advisers, most investors will likely lose tens of thousands if not hundreds of thousands of dollars in costs over their investing “lifetime” through mutual fund MERs. Pretty tough to save most people that much on taxes. Also I have no idea what you are talking or referencing with “good portfolio” statements. Ridiculous and misleading statements. I have cited specific studies that show mutual funds consistently under-perform their benchmarks. IT IS THAT SIMPLE!

          3) “Compounded losses” means that all the money that MERs take out cannot stay in the market and compound long term. Again, pretty simple concept unless you’re trying to skew facts.

          4) Thank you for half-supporting my point on the overall structure of the mutual fund industry. If you read the comments you’ll see that I’ve consistently held this position (as well as in my eBook where IG is not mentioned). I believe the reason this thread keeps getting slanted to IG is simply because it is ranking high in the search engines for the term “Investor’s Group” as opposed to “mutual fund pros and cons” or something similar. I’ll take this opportunity to reiterate that IG is only one of the more blatant offenders in an industry that is incredibly unfair to consumers and makes a mockery of transparency.

          5) Your point about losses and market timing are again irrelevant to the fact that the majority of mutual funds under-perform their benchmarks even BEFORE their high MERs are taken into consideration. It’s a structural flaw that gives incentive for risky behavior as opposed to long-term thinking.

          6) There’s no need to by my book because it’s free.

          7) No idea why you assume DIY investors will automatically pull money out at the bottom of a market cycle, but mutual fund investors are impervious to irrationality.

          8) I’ll leave you with this. If you want a decent adviser with proper motivation to do what’s really in YOUR best interests – then go to one that tells you what they will charge you upfront! Just like pretty much any other business in life.

          • I can only hope that people reading this article and its responses have the intelligence to see both sides of the coin here. Your blatent arrogance and the way you portay yourself as an expert on this subject are what makes you look ignorant. You would get much more support in your topic, if you presented it in a “matter of choice” format.

            1) Your comparisons and math mean almost nothing, You are comparing apples to Kiwis, an S&P 500 index fund has its place, but to simply buy units of a fund without either knowledge or advice is setting ones self up for dissapointment.

            2) I suspect that you believe all business’s and people run and operate for free? That is what your suggesting, most advisors make a lot less than you seem to think, and just as an FYI, most of the advisors I know that make the most money on a per client basis are FEE BASED.

            A “good portfolio” could reference one that may underperform the market in a bull market or market recovery, but doesn’t perform as badly in a bear market. That is the problem with following an index, in my experience most investors act irrationally and emotional in a market downturn. What would you suggest for planning if your following an index? How does one be sure the markets wont take and the investors lose 30% right before they are about to retire?

            3) “Compounded losses” means that all the money that MERs take out cannot stay in the market and compound long term. Again, pretty simple concept unless you’re trying to skew facts.

            I believe you need to look up a definition for the word compounding. Your statement would be better placed “loss of compounding growth” Again, a loss cannot directly compound, in fact, if you want to talk MER’s, with what your statement suggests, the MER is actually lower each year, as the investment ammount is decreasing, and the MER is a percentage based off of that.

            4) Your very welcome for half supporting your statement, because your only half right, and again, here is where your arrogance plays you down. I happen to be open to accepting different sides of the coin, and understand that different things work for different people. I will leave IG completely out of this, I will still defend that most people are better off with a qualified advisor, and this is based off of years of experience, not something I read online through google once.

            5) You lead on like every mutual fund on the available product shelf loses money, and lets not forget to note that MERs are “NET” of return, I am sure that you know that, but I wanted to make that clear for the every day reader.
            So would you lead people to believe that following an index is much less risky that having a balanced portfolio? Does the every day person who works and has a family and obligations and bills have time to pay full attention to the markets and planning their financial future? What if they lose there job and need to dip into their money after the markets tank 30%? These are all questions that I plan for and address with my clients, that is why I get paid.Will you be there for the people that read your e-book if they make a mistake? I will, accountable and ready because we have already planned for it, regardless of MERs.

            6) Well its good to see your one of those businessmen who do this for free, for the benefit of the general public. I’m sure you invest your time and resources into this web site for the fun of it.

            7) Experience, I’ve watched it time and time again, what people say they will do and their emotional reaction are two different things. So your trying to convert mutual fund investors into doing it themselves, yet you have stated that mutual fund Investors are proned to irrational behavior. So what your suggesting is that your e-book is going to change their matter of thought and the way they emotionaly react and behave in a matter of perceived crisis? That is the greatest risk you take, and again I ask, who is there to be accountable if that happens?

            8) Ill leave YOU READERS with this, if you are willing to dedicate the time and effort, abeit manageable, into managing your own financial future, than by all means it is possible, and by not paying someone to do it for you, there is the potential to make substantially more in your return. However, if you don’t wish to learn how to do it yourself PROPERLY, dedicate 100% without a flinch of doubt to not acting on emotion, and be accountable to yourself understanding that this path has its own risks, find an advisor whom you trust and will act in your best interests, whether they be fee based or commission or bank, because when it comes down to it they all get paid.

          • First of all don’t take my word for it, here is yet ANOTHER recent article detailing that people are finally waking up to the ridiculously non-transparent world of mutual finds in Canada:

            http://business.financialpost.com/2012/11/16/canadas-fund-industry-lagging-on-fee-transparency/?__lsa=48c0-58c0

            Here is a great quote from the article: “People are very distrustful of financial institutions and advisors and the commission-based model is fraught with more conflict than fee-based, mostly because it is less transparent.”

            1) Yes trusting mutual fund managers whose incentives are ridiculously misaligned with investors is safe, but an index fund is bound to disappoint…

            2) Fee-based is simply the best and most transparent way to go. If everyone went fee-based there would actually be a decently competitive open market because the average consumer could actually understand the transparent model being used!

            3) Hey we agree on one thing! Your terminology of “loss of compounded growth” is indeed a better descriptor of what actually occurs. Regardless, the average retail investor loses way too much money and has very little concept of how this occurs.

            4) Reasonable people can disagree on just how useful a very good adviser is. A non-transparent compensation system that recommends financial products with a huge systemic bias is not reasonable.

            5) Don’t put words in my mouth (or on my comment board as it were). I only mean exactly what I say, John Bogle has mathematically proven that the majority of funds out there will not beat their benchmarks even before fees are calculated in, and the vast majority definitely don’t beat it after the fees are baked into it. Representing the argument as “balanced portfolio vs indexes” is ridiculous. By definition, an index of equities or an index of bonds will be just as diversified as their mutual fund counterparts, in fact, likely more so. Ok so your clients will be better off in a “worst case scenario” if they’re in mutual funds as opposed to broad-based indexes? Again, ridiculous assertion that sounds like it comes out of a propaganda pamphlet.

            6) It’s a hobby for a teacher that is concerned about financial literacy. I definitely make less than minimum wage off the site as a whole and absolutely nothing from my book. I specifically made it free so I could respectfully claim to be non-bias … unlike certain other actors within the industry.

            7) Understanding why indexing works will almost assuredly encourage people to think long-term as they are not obsessed with “beating the market” and “5-star funds” and other terminology that the mutual fund world likes to throw at people. You say your accountable, but are you really? Advisers get their trailer fees regardless of performance and that’s just basic arithmetic as Bill Clinton would say.

            8) Mutual fund salesman are the only major industry that has such terribly non-transparent compensation models. Don’t take my work for it, read the major papers out there these days.

  70. As a future bachelor in financer, i am interested in a career as an advisor and later financial planner. i approached many insitutions for a job, and I liked the idea of building my own ”business” and finding my own clients that IG offered rather than have the ”here is a list of clients, now sell products” that banks seemed to go with. However, reading this blog it seems people have a fairly negative view of advisers in general and is definitely making wonder if I shouldn’t choose another career.

      • Thanks for your reply. I just checked out moneysense.ca that gives a list of fee-only planners in canada.
        http://www.moneysense.ca/2012/10/01/where-to-find-a-fee-only-financial-planner/
        I have to ask, how in the world can you actually sell those hourly fees to the common guy who wants to start investing and wants help? I mean 150$/hour is going to make me run the other way very fast. I understand in the case where you have a good enough amount to invest, and I also realize that commission based service is shady with hidden fees and especially conflict of interest the advisors and the mutual funds they work for, but for the little guy, it looks daunting. Also, isn’t the point of investing using money now to make profit later? If you pay someone now, you have less money to invest to now which again for the big leagues is fine but for the small investor seems like a turn off … I want to point out I’m not trying to defend one side or the other like some of the other posters here I just want to hear your opinions on the subject.

        • Fair enough Future Planner, your response is actually a great one! If everyone could see the fees they were paying they might get a lot more motivation to do some of this stuff on their own! First of all, there is some truth to what all of these pissed off investment advisers are saying on this thread in that there is a lot of value in a professional giving you a holistic view of your financial situation. Taxes, insurance, investments, wills, and many other financial products can be confusing for people, and rather than investing their own time, it could be well worth it for them to pay for this advice. It will likely pay for itself several times over. I’m a huge advocate of the cliche, “No one cares about your money more than you do,” and consequently I recommend education yourself from a variety of sources that I have detailed all over this site.

          HOWEVER! Think about the incentives a commission-based salesman has to plan your finances a certain way. Are they really going to recommend products that don’t make them any money? If they don’t (which of course they don’t, they must get paid some way) then how much is this bias advice costing you in the long run? Check out the calculation I did in response to other comments on this thread to see how many people will lose hundreds of thousands of dollars in future earnings as a result of MER fees. It is true that some of these returns are indeed sacrificed by paying $150 an hour as well, but it isn’t even close in the long run.

          Think about it, what does Moneysense have to gain by recommending this to people? I’m sure mutual funds would pay them way more to pump their products right?

    • @ Future Planner – To start off a career I wouldn’t advise any job as an advisor to be honest. If you are fresh out of school, you don’t really know a whole lot to be advising anyone, unless you already have industry experience. There is a lot of pressure to build up a list of clients on your own and make sales when you first start out. For some of these places you only get compensated with whatever commission you receive on your sales as opposed to a salary. A good place to start is a similar job with a salary, or a combination of a salary and commission, that way if you don’t like it you can at least ride it out until you find something else.

      • Hey Justin,
        Thanks for the reply. I just got a job offer that does just that – I think I’ll go with them. Build some expertise a couple of years and then switch to my own fee-based practice once I get CFP credentials and contacts in the business. It just seems like the most ethical pratice and I believe transparency is the way to go when jusifying the advice you’d be giving to anyone.

        • Sounds like a great plan “planner”. Who knows, maybe I’ll be one of your first clients if I need some specific advice in a certain area like Wills! To me, that’s the real beauty of fee-based, you only have to pay for what you need.

  71. I have been with Investors Group for many years, where they separate themselves from the pack is the full holistic planning.

    I know we are not getting returns of 12% like 15 years ago, we should be happy with 3%, at Investors Group this is what I am receiving, based on my risk tolerance.

    There is not a firm out there that can compare to the service I receive with this company. You can have the banks and their hidden fees, why do you think they keep recording record profits every year, off of your back.

    Have you ever tried to get out of a mortgage with a bank, talk about fees.

    Not with Investors Group. I have my investments, mortgage and insurance with them and they are top notch.

    Shame on anyone slamming them, they must work for the compatition.
    Shame!

    • I have no idea what you are talking about with banks and hidden fees when you are paying huge MERs!!!! This is what happens when no financial literacy is taught in our schools…

      If you thought there was truly no fee for breaking your mortgage you definitely should have done some more reading before you signed your mortgage contract.

  72. If I may make one last comment, I would like to try a slightly different approach. First of all, thank you for publishing my comments, as I know you could have just have easily moderated them and not had to reply at all.

    Second, I have to apologize for criticizing the “business” aspect of your website, because I do believe that your interest here is much more than that, and your website is full of great information. What you make off of your website is completely irrelevant to this conversation, but here is why I brought it up;

    You “rip into” advisors quite often, for the way they get paid and the lack of advise that they give, and I will 100% agree with you that in a lot of the case that is true. But, that does not mean we are all bad, or that we all make a killing off the backs of others. In fact, for the ammount of work I put into each client, I make very little, because I always do what is right for them, even if that means reccomending a product I don’t get paid on, or in a few cases, reccomending my services are not the best fit for them. I hope that you can at least appreciate where my frusturation comes from?

    Fee based consulting, yes I agree that the compensation structure for commission based advisors is not transparent enough in the least. Here is the problem, not a lot of people are willing to pay for advice, when they think there is a better alternative elsewhere (Commission based, bank) because they dont understand how the compensation is built in. I have to say there are arguments for both fee based, salary based, and commission based… but to save an argument, I wont get into that. You say the compensation for commission based is misleading, and I agree. I would love to go fee based, I would probably make a lot more money in fact, if I only thought it would work for my practice. The truth is, people will run from $150 an hour, even if there really paying more in an MER. I realize im talking in circles a bit here, but hopefully what I’m saying is clear? Do away with commission based, then yes it would make sense.

    Yes I can pull articles that support my points as well, but I think we have both stated our positions, and though we disagree on some things, I don’t think it would be any benefit to continue the debate. I understand your position, and in many ways agree with you, I only wanted to point out that there are always two sides to a story, and that much of the horror stories, one way or another, that people read online are not the “whole” truth.

    Why is it that we don’t have a basic course in school for basic financial literacy? This is something I ask myself every day. My own chosen occupation aside, because what I do wouldn’t be nearly as valuable, but most of what we do and try to get people to understand every day could have easily been learned by someone in 1 semester at school. If there is one thing I am behind you on, it is that…

    @David –

    It sounds like you are happy with the service you are getting, and I really hope you are with someone who is looking out for your best interests. One thing though, regarding your mortgage, IG mortgages work very similar to the banks, the fee structure for getting out will be similar.

    @Future-Planner

    I would reccomend doing your research before making any descisions or jumping into financial planning as a proffession. From someone who has been down that road, it is a over-saturated market, and it is tough for even the best and experienced planners to start right now. If you do, you have some options, start at a bank, entry level or slightly above, learn the ropes and work your way up, it could take some time, and you will likely be doing mostly transactions and sales, not a lot of planning (until you reach fp level). You could try to find an independant or fee based consulting firm to take you on, but for someone with little or no experience, I would love to hear your story if you did ( no sarcasm intended, I actually would like to hear), or you could start somewhere like IG (just an example, commission based). I will tell you right now, most people who start in commission will not make it to there first year annaversary. Sadly, until you establish yourself enough to build on a refferal basis, the job is a lot of sales. The training is very good, and you will become competant enough fairly quickly to deal with basic investing concepts, but if your not willing to work 60 hours per week for little pay, and spend hours working on plans for clients that you may not make a cent on, this route may not be for you.
    If you really want to be a financial planner, I would suggest this. Find a CFP you can work for, even if you start as an assistant, then an associate. Learn everything you can, but you will still be getting paid at the same time. When you have enough knowledge to provide confident and valuable advice to people, then doors will open for you, and you will have options.

    I hope that I have wrapped up my participation here, agreed and disagreed with this particular post, but overall to thank you for the education you are trying to provide, the basic financial literacy that many Canadians lack. Just keep open to opinions to support both sides of the argument, for not every aspect of mutual funds or advisors is pure evil.

    • I like the new direction your going here Chris.

      I guess I can appreciate your being frustrated at being painted with the same brush that other advisers get painted with in your industry. So what it really boils down to is actually something we both agree with – financial literacy. If more people were financially literate enough to understand the various compensation models (which really should not be that hard in my opinion), then it would allow honest advisers like yourself to charge more of an open and honest premium for your services and allow for an open market where pricing was easily comparable. I’m sorry that you are handcuffed by the sticker shock of $150 per hour people going crazy. To me, a comprehensive financial game plan for most young adults is easily worth $1500-$2000, and after that, “yearly checkups” wouldn’t be nearly as much. I think that people like yourself would ultimately be more happy with this structure as well.

      Here is the other great reason you should go fee-based Chris. All other things being equal, you can’t tell me that many of your clients would not be better off if you used low-cost ETFs to balance their portfolio instead of mutual funds. If you put this much effort into an internet convo I think there is a very great chance you do keep your clients’ best interests in mind, but as you stated, you still have to get paid right? If you were paid upfront, you could get their equity exposure, their bond exposure etc, for much less over the long-term. Plus, you wouldn’t have to settle for the crappy benchmark-trailing returns that most mutual funds give. The debate between indexes and mutual funds just from a structural point of view is not even a debate to me. When you look at the incentive mutual fund managers have to try and make short-term windows to get bonuses and attract more capital it encourages all kinds of weird behavior. On top of that, many of them closely mirror the broader indexes anyway, and then just charge you an arm and a leg for it.

      Thank you for being honest with David and FP, perhaps you should open up your own blog? I follow a couple fee-based guys, and I’m even a fan of Ed Rempel who is a *gasp* commission-based adviser! He presents the best case for picking mutual fund managers that I’ve seen yet … still hasn’t convinced me though.

      Finally, I appreciate the *bi-partisan, reaching across the isle approach* (sorry too much US election coverage). I still think that guys like you that obviously want to help people and are willing to work hard would thrive under a more transparent model, and would eventually get more of the compensation that is going to undeserving mutual fund managers right now.

    • Thanks for the reply David,
      Indeed you are right I will not jump immediatly into financial planning with no experience whatsoever and I don’t have the credentials anyway, so I believe I do need to work in the business for a number of years before really giving any advuce to any customers. However, I really have to ask you where you got the info that the market was over-saturated. I don’t mean to pry, but in the interviews that I passed, most of the interviewers turned very interested when I mentionned that getting CFP credentials was part of my plan for the comming years, them (and I mean all the organisations I visited) stating that there is a lack of qualified CFP professionals in the workforce and most organisations are looking for them. Note I say certified planners and not the base financial adviser – which there are plenty of.

  73. I am tax preparer, I always advise my clients to inquire about fees before opening account with any financial organization. Also suggest to park the funds in Cash or GIC’s ( I dont sell any GIC’s or any investments). The tax benefit alone is more than what the investment will bring with the added risk.

    The author has posted an original experience. lot of new clients who lost with IG now realize that cash parking with a self directed no fee account would have given a better result.

    • For what purpose are these clients saving the money? I honestly hope you are not advising clients to park money in cash or GICs that they are going to use for retirement (perhaps decades down the road). If they are going to use the money in the short to mid-term, absolutely cash or GICs has a purpose, but to advise someone to put long-term money (10+ years) in cash or GICs is a losing proposition once inflation is accounted for.

      Do your clients understand why they lost money with IG? If they talking about losses resulting from the crash in 2008, they likely would have lost money no matter where they had money (assuming it was in equities). Even broad index based ETFs lost money in 2008, so it’s disingenuous to blame IG (or any institution) for those losses.

      • Hey, we agree on something else Scott! This is absolutely true to anyone reading. ETFs would have likely lost just as much as most mutual funds that year. The large MER fee on top of the market crash probably stung extra hard that year though I bet eh?

  74. I think you are all a brotherhood of money thirsty pigs. My sister invesred some money with your rag tag operation and got burned before I got wind of it. Can’t wait to sick a lawyer on you assholes. Go out and get jobs rather than trying to rob the elderly. Hope all of you skags end up with the Earl Jonses and Bernie Madoffs.

    • Ian,

      I feel your pain and totally agree with you. I was initially ripped off (by IG) for about $50,000. Disgusted and angry as hell, I initiated transfer of all of my remaining money to a major bank.
      Even before I started the transfer, I filed a lengthy complaint with the MFDA and after about 6 months of investigation they concluded that my former IG ‘consultant’ (RC – Niagara office) had violated MFDA rules and ethical codes of conduct. They slapped him with ‘disciplinary measures’ and his name is now flagged for the forseeable future.
      It looks like this really pissed off their management. They slapped me with about $30,000 in DSC penalties on redemption and managed to ‘misplace’ $300,000 of my hard-earned life savings…More than 10 weeks have passed and they are still keeping my $300,000! I should mention here that they zeroed out my IG accounts 2 months before!! They have ,in essence, stolen my money.
      The people at my bank say they have never seen anything like this done before. I have been in communication with the Police (fraud unit) and will be paying them another visit if my money doesn’t arrive by tomorrow evening.
      The OBSI have also started an investigation of IG on my behalf. I will pursue a lawsuit after OBSI complete their investigation and I am making plans to have my case aired on TV.
      I hope this might supply you with some ideas.
      BTW – IG compliance is a complete waste of time but is a necessary step before going to MFDA or OBSI.
      Please let me know if are planning a protest or class action suit.

      Good luck and fight the good fight!

  75. I retired as an IG rep with 26 years of service to my clients. You can avoid sales commissions with IG but you cannot avoid fees, albiet hidden to most who don’t educate themselves as to how to determine what they are ( Prospectus, IG website, asking etc. ). If it is to be a successful undertaking there will definitely be costs and advice and service is not free. If you want to do this yourself and think IG is making a killing then get a broker to buy their stock. In the past three years IGI has gone above and below it’s current share value and hasn ‘t made gains other than re-invest dividends. On the other hand, most of my retirement savings is in IG Dividend Fund which has returned over 7% as a three year average in IDF A, B, and C funds – after the management expenses have been taken. If you think there is a free lunch out there you are wasting your time.

  76. Wow!
    I’m so surprised at all the negative Comments. and Saddened.

    Yes I work for IG, and no, I’m not a crook in a suit. If any of my clients experienced anything close to what some of you have then I could not sleep at night. I have a family and a conscience and a moral compass & ethical beliefs.

    Yes all our Funds have Management fees which come off the top and performance is quoted net of fees, so if a fund is making 4% then 4% is what you’ll get. The MER or Management fees are taken out already, and yes they pay me and my collegues a trailing commission.
    Much like any other Mutual Fund company out there so don’t panic, it’s normal practice.

    Sometimes though you get what you pay for, sometimes, higher fees means better management, so don’t forget that before you pound all your money into low fee ETF’s or e-Series stuff at the bank. This money is not managed. Nobody’s watching it so you do get what you pay for (In fact if nobody’s looking at the fund I think you’re paying for nothing right?)

    So No-Load Vs DSC. Big issue, I know, and if your consultant didn’t discuss DSC fees with you then yes I’d say you’ve been badly served and have a right to complain. I know in a lot of cases the discussion was had but forgotten when it came time to withdraw money. Personally I have the discussion and let the client choose and then have them sign a piece of paper stating whether it’s no load or DSC.

    If you lookup Investors Group on the Better Business Bureau, you’ll see that for the whole country we only have a handful of complaints lodged in the last 3 years, with over a million clients being served that’s pretty good in my opinion. Take a look at your Mom & Pop Plumber down the road (if they’re even registered) and you’ll see a lot more complaints.

    Any-hoo, no organisation is perfect and no one person is either. I always say to a prospect that it’s not who your advisor works for, it’s whether they work for you that counts.
    I know firms like Primerica and Edward Jones get ripped on a lot and it’s hard to defend them with the poor training and support they receive but there are good advisors at those firms too, I’ve met them, you just may not be lucky enough to find them & get stuck with some newbie.

    Conversly I’ve heard some real horror stories from client leaving Banks and the utterly poor service and woeful advice they received there so it’s the same in every financial firm.

    Bottom Line folks is find someone you trust, ask all the right questions. If you think you’re being deceived then get it in writing and at least if you’re right then you’ve got something to take to court.

    Sorry again for all the bad experiences listed. I wish you were all my clients and you wouldn’t be on here posting these horror stories. I wish you all the best.

    • Richard, I appreciate the fact that you are a “good adviser” and are more upfront with your clients in regards to fees. I do have to correct one statement however, you said, “Sometimes though you get what you pay for, sometimes, higher fees means better management, so don’t forget that before you pound all your money into low fee ETF’s or e-Series stuff at the bank. This money is not managed. Nobody’s watching it so you do get what you pay for (In fact if nobody’s looking at the fund I think you’re paying for nothing right?)”

      This statement is simply false in every sense. Higher fees NEVER means better management (if we are talking about MER fees at least). Several studies have shown that there is actually an inverse correlation between MERs and the fund’s performance. Therefore, you’re actually getting less, the more you pay for it! When money is managed it shrinks. The stock market can be very simple. Diversify – and then leave it alone. The idea that the vast majority of human beings can add value by “managing” money and then taking a solid chunk of it just isn’t true. Let’s move to a fee-only system instead, and then we will truly have a “get what you pay for” free market set up.

      I should reiterate, I’m not a huge fan of how this thread turned into a debate about IG either, I’ve repeatedly asserted that my issue is with the industry as a whole.

      • Richard,

        You are correct about the absence of IG complaints on the BBB website…you are wrong in assuming this means that IG is keeping clients happy. I personally received HORRIBLE treatment at IG; from my former ‘consultant’, from his boss, and from their utterly useless compliance dept. So why don’t I have a complaint on the BBB site? Well, I sent them a lengthy complaint with all of the details of how I was ripped off and they directed me instead to the MFDA and the OBSI, saying that complaints of this nature do not fall within the mandate of the BBB. So I guess the lesson to be learned here is never ASSUME (you know what happens)…
        BTW – MFDA investigated and found that my former ‘consultant’ (salesman) had violated securities regulations and ethical codes of conduct; he is being disciplined. OBSI is currently investigating.

        Also, I did NOT get what I paid for. If I had gone with my own judgement, instead of giving in to an aggressive and incompetent salesman who had the nerve to call himself ‘professional’, I would be worth at least $80,000 more today.

        • Zig,

          I really hope your labor of frustration bears fruit soon and that you’ll share the outcome with all who read these posts.

          I personally couldn’t sleep at night or look my kids in the eye if I treated someone like this, but then i know there are ‘advisors’ (aka salesmen) out there (in all institutions as Teacher keeps reminding us) that will sleep like babies on their big whacks of commission cash.

          But that’s not me nor is it all of us, heck teacher, do you have an article on Realtors yet? lol now there’s a nice gig if you can get it :)

          Take care & best of luck

          FYI (I said ‘sometimes’ you get what you pay for, not always, i know, i’ve been burned before too)

          @ Teacher, I can’t find those studies you mentioned on the Correlation between MER’s & Performance. Have you posted them here or could you re-post please?

          • Hey Richard,

            Haha, interesting that you mention an article on Realtors. We definitely have one, and it’s probably the most controversial on our site after this one. Realtors seem to believe we’re picking on them too!

            As far as the studies I’ve mentioned, I can’t remember their sources off the top of my head (which I know sounds suspect) but here is a fairly in-depth study by a great Canadian blogger. Here is another solid study on the phenomenon. It makes sense if you think that most mutual fund managers are either closet indexers, or are simply on a run of good luck and will revert to the mean eventually anyway right?

            TM

        • I complained to BBB about Investors Group and all they did was refer me to the Office of Superintendent of Insurance. My advisor refused to return my calls about transferring to Qtrade. IG wouldn’t let me transfer in kind and charged me $1200!

          • Sounds like you withdrew DSC’d money which carries a withdrawal fee which is quite obvious in any literature you were posted but probably never read.(Have a look and you’ll see the letters DSC next to your old fund names and in the pamphlets you’ll find a section on fees.)

            Your consultant should have told you about the fees, both when you invested and also when you withdrew.

            Now this is the same in any institution, it’s your advisor, not the company that’s to blame. You can get a template from most institutions on claiming back “ill-gotten” DSC funds, but be warned, if your consultant has proof they talked to you about it and you just don’t remember then you’re at fault.

            If you’re sure the fees are all new news to you then go to http://www.investorsgroup.com/en/1387.aspx
            and lodge a proper complaint saying you were never informed of the DSC fees at any stage and they’ll give you your money back (probably)

            They’re more interested in helping people than ripping them off, unfortunately the same can’t be said for all the advisors out there, some of whom just aren’t doing a good job.

            Best of luck, again, if you were truely wronged I hope you get it righted

          • Hi Scammed,

            This forum is a little like a country music song…there’s always someone hurt’n more, and this is unfortunately the case if you are one of the unlucky ones who’ve dealt with IG or any other crooks like them.

            They charged me (DSC penalties) in excess of $30,000 to transfer to a reputable (I hope) institution, TD Waterhouse. I was at IG for less than 2 years and never made a cent; they actually lost about $25,000 for me through their incompetence and greed. Nobody at IG returned my calls or emails either, and when I did manage to get the boss of my former ‘consultant’ on the phone, he was rude and lied to me, and it just turned real ugly. I have never been angrier in my entire life and the end result is that I no longer trust anyone.

            Not sure what the “Office of Superintendent of Insurance” is but if you want to complain about IG, you need to contact the MFDA (Mutual Fund Dealers Association) and after they have completed their investigation you can forward your complaint to the Ombudsman’s office (OBSI). The OBSI can actually recommend compensation for damages by IG, whereas the MFDA can only reprimand your IG salesman. The one thing you should know up front is that MFDA will make you go through IG’s ‘compliance’ dept., which is a total joke, but at least after 3 months you can proceed with the others who are not biased.

          • Richard,

            I feel obligated to point out that you are incorrect about some items in your posting:

            1) It is not ‘obvious’ in the literature…unless you think putting the relevent information in the middle of a book of mis-numbered pages is obvious. And by the way, it doesn’t help getting the literature AFTER you’ve invested and therefore have already been scammed.
            2) They will probably NOT give back your DSC penalty money – I KNOW – I’ve been through this! Try MFDA and OBSI, or a good lawyer if there is enough $$ at stake.
            3) I wish they (IG) were “more interested in helping people than ripping them off” but this, again from experience, is simply untrue. I was ripped off rather severely by my IG ‘advisor’. The MFDA found him in violation of securities rules and ethical codes of conduct and have taken disciplinary measures against him (RC – Niagara office). All the while, IG compliance insisted he did nothing wrong…Huh?

            The following is simply MY idea of how the IG machine runs, and may not reflect reality (legal disclaimer):

            IG relies on huge amounts of new money coming in (from new clients) to keep their little empire running. They do this by employing a very aggressive sales force and constantly hiring new salesman to keep up with the high turnover. Once a salesman has exhausted his own social network of relatives and friends, new clients become harder to find. He may have to turn to selling used cars or something alse.
            Clients usually discover soon after investing that they have been screwed, but the client turnover is not as high as one might expect. Why?
            Because all of the clients are conned into ‘investing’ their hard-earned money in DSC funds and the heavy, slowly decreasing penalty structure scares most into sticking around for a while. I must admit, that part was rather ingenious (in a devious and unethical way). This creates a nice, safe ‘buffer zone’ between money in -> money out, and is something that traditional ponzi schemes could have benefitted from.

            IG also makes huge profits by charging some of the highest MER’s in Canada. Have you ever wondered why most IG mutual funds are at the bottom of the heap when it comes to performance? Well, good mutual fund managers cost a lot of $$, so if you hire underperforming managers you don’t have to pay them as much, and of course IG gets richer.

            There is also the additional revenue from selling life insurance (at a premium rate), and the various leveraging schemes that IG has conducted in the past.

            I see them as the Bernie Madoff of the north.

  77. WOW! is there an echo in here?

    “Anyway, he was telling me about their “Allegra moderate portfolio B” and how it has performed well and how I should put my money in it. He was trying to convince me to transfer over everything I had in other investment companies to Investor’s Group into this “Allegra moderate portfolio B”, so I could have more “diversification”.

    The story your IG adviser gave you is the exact same story mine gave to me. She also pushed hard for me to move all my holdings into IG but thank goodness I kept a lot of my well performing funds and stocks away from IG

    That group of funds is junk and my portfolio is down over teh last 7 years, while my TD Waterhouse Holdings are up over the same period. On top of that my TDW funds are no load and I only pay a penalty if i hold for less than 6 months but they’ve performed so well why would I change?

    My advice is to run away from IG as fast as you can if they start giving you their schpeel.

    • Absolutely.
      I also believe the Investors Group mutual funds are truly junk, not just because of their dismal performance numbers, but also because of the way they are sold (DSC with minimum 7 year hold), and with the excessively high MERs taking most or all of the profits, there is nothing left for investors (victims). I have looked at some scenarios involving the “Allegra moderate portfolio” type (fund of funds) and in that case it looks like leaving money at IG until the DSC penalties run out could cost you 30% or more while transferring out will cost you 5.5% DSC charges (plus any ‘lost opportunity’ since IG may take up to 3 or 4 months to transfer your money).
      With so many waaaaay better places to invest out there (like TD), I think IG is only preying on the uninformed or anyone who has had the misfortune of being befriended by one of their hungry salesmen.
      If you have been victimized by Investors Group the best thing you can do is spread the word so that at least your friends, family, and acquaintances won’t get scammed!

      • Investors Group DSC schedule runs out in 7 years and the 5.5% penalty only applies to withdrawals within the first 2 years (which is explained to client).

        The Allegro Moderate Portfolio A has an MER of 2.57%. I’d like to see your math and how you turn that into a 30% or more cost in 7 years.

  78. I am a mutual funds advisor (not with IG) and yes, all mutual funds have fees and no, there is not one advisor who does not receive something from those fees.

    But think of it this way -when you go to buy a sweater at H&M, or Walmart, do you go to the cashier and ask them how much THEY get paid from what’s reflected on the price tag? No. But you’re ok to pay the taxes willingly to buy that sweater.

    The MERs are much the same. There are three different sales charges :
    Deferred Sales Charge (DSC-which is back-end and yes you are on the hook for 7 years)
    Low Load Sales Charge (LL which is also a back end but you are on the hook for 3 years roughly)
    Front End Load (FE and it is usually a percentage anywhere from 0% to 5%)

    If the rep sells you a mutual fund on either a DSC, LL, or FE at any percentage above 0, the fund company will pay him or her a commission which is an advance. To recoup that commission, the FUND COMPANY will charge an Management Expense Ratio (which would include trading fees) that can range anywhere from 0.7% up to 5%.

    Now back to DSC or LL – if you purchase on any of those schedules, it is deemed that you had advised you do NOT need to withdraw from the fund (ie: require money from it) either within 7 years or 4 years.

    IF you DO withdraw within the 7 or 3 years, yes there will be a percentage deducted from the funds you withdrew. Every year, that percentage decreases, so after the 7th year, no fees to withdraw from a DSC and after the 3rd year no fees to withdraw from a LL.

    If you purchased on a Front End schedule (anything other than0%) then the sales charge is deducted off what you put in at the beginning and you will NOT have a fee to pay at redemption.

    I (as a financial advisor) try to look for mutual funds with lower MERs (range from 0.77% to no more than 2.5%). The way i see it, the lower the risk of the fund, then the MERs should be lower as well. As they get higher, then the management of the fund is more in depth and I am therefore ok with the 2.5%.

    So it’s not just Investor’s Group – RBC, BMO, CIBC, anyone and everyone all charge the same fees and MERs – it is up to the REP to choose the best fund and lowest costs for the client.

    PS – I used to work in mutual fund Compliance, this is why I choose the lower MERs.

    • Thank you for acknowledging your place in the industry right up front Tanya.

      Here is why your Wal-Mart analogy is completely wrong – the cost of the cashier has already been included in the price you pay for the sweater. This is the same right across the sweater industry. This allows consumers to easily decide what sweaters offer the best value for their dollar. This is the polar opposite of the commissions structure. I have no idea where you’re going with the taxes which makes no sense at all in the analogy and introducing taxes to the argument certainly doesn’t help any case for mutual funds.

      There is no data that shows your correlation between higher MERs and “more in depth” management. It simply doesn’t exist. There is no data that says paying more in MER fees will give you access to better fund managers (See my above comments for more details).

      I do agree it’s an industry-wide problem (as I’ve stated multiple times), but your weird analogies and false logic are the very types of arguments that are destroying the retirement nest eggs of Canadians everywhere.

  79. Well after many battles with my “Certified Advisor” I was able to move a bunch of my Allegro holdings last week into other IG funds but I had to stick to the A Series funds. I hate all their damn restrictions, but as I am not making any new contributions, at least this transaction does not automatically restart a new 7 year period.

    My expert advisor now wanted to put me in into funds whose recent Daily Closing price was almost double that of what my Allegro portfolios were. Stellar advice!!! Not only had I already lost money with those Allegro dogs, but now she wants me to have a fire sale and get half the units because her new picks were double the unit price.

    I did my own research and listened to what most economists were saying. That being that the CDN economy will slow down this year while the US will grow so I diversified between funds with funds with strong blue chip companies and good dividend earnings.

    Some of her responses defied belief: “You are the only client that I have ever had who has gone to these lengths to compare investments and dissect my recommendations” Are you kidding me? Not only are your recommendations what put me in the whole, but you’ve also done nothing to help me recover when there are many funds at IG that have recovered and grown 20-30% in the last 3 years while I’ve been missing the boat.
    “For most of our clients, the 7 year time horizon is not a problem”. Really?? She should read this blog for a dose of reality.

    I am already over $1000 ahead of my position when I switched funds last week. Had I stayed with the Allegro garbage, I doubt if I’d be up even $100 more. Now I’m not an advisor so do your own research if you are making your own picks, but if anyone is interested here’s how I spread my holdings out over the following:
    10% IG FI Canadian Equity A #348
    10% Investors Dividend Fund A #283
    12% IG Beutel Goodman Canadian Balanced Fund A #320

    13% Investors U.S. Dividend Growth A #575
    15% IG FI US Large Cap Equity Fund A #787
    15% Investors Core U.S. Equity A #836

    7% Investors Euro Mid-Cap Equity A #343
    8% Investors Global Financial Services A #358
    10% Investors Global Dividend A #521

    I know there may be some “certified advisors” who may jump all over this and slam me for giving advice but f*** ‘em… If my certified advisor wants to pay me back all the money she lost plus any gains that I’ve missed, then I’ll retract that statement. Caveat – Again I am not an advisor, I am just sharing.

    • Whoa. The share price of a mutual fund, or any stock, isn’t really very relevant on it’s own. To put it in perspective, if there are two apples, you can buy a part of one apple for 2 dollars, and another for 1 dollar. But the part that you’re buying for 2 dollars might be half the apple, while the one for one dollar is split between 50 people. Which would you rather? It’s the same with stocks, and in a sense, mutual funds. A cheaper share price really means nothing, especially with a mutual fund. The performance (by %), is how you should be comparing mutual funds.

      • Hi Matt,

        Can you clarify something for me. If the statements says the funds were reinvested, was a commission paid again?

        Thanks,
        Susanne

  80. I am very familiar with investors group and very confident in the company. From the sounds Of it you had a bad experience with the consultant not the company. A few years back no company or mutual fund was out of line with what the markets were doing from what I seen. And it is a known rule that a consultant would have to explain MERs and pay structure. I have an excellent advisor who discloses everything and has done some really great things for me. Like advising me to get a will and holding me accountable :-). Encouraging me to wait and the markets would come back because never in history have they not. (And they did and then some. He talked me out of dealing with my money with emotion and think intellectually about it. E/Q .. I/Q I think is what he called it). And MERs have to exist because i dont expect him to do all the work for free and every fund in royal bank, cibc, bmo …… EVERY SINGLE mutual fund has an MER. The thing i like about investors group is that they have no closing out fees and many of the extra fees that are charged by other institutions as well as banks. But brokers i hve found can be the worst if they are not a reputable Company. and they offer so much more then any bank because they are liscenced different. Oh and did i add they gave me an awesome interest rate on my mortgage and made it possible to pay my mortgage off 3 years early. So I think when people complain about a company quite often your actually complaining about the consultant. There are bad apples in every company and I think it’s our responsibility to do our homework. Every person in IG is self employed. As far as I am concerned. If it indeed the situation you say is as true as you say then you have the right to hold him accountable through the MFDA. So instead of hurting the company and painting a bad picture of them. Maybe hold the consultant liable.

    Also. He was right about te eggs in one basket. Honestly??? Do you believe that IG buys anything different than RBC OR BMO OR …… ??? Think about it. The funds you buy are virtually the same thing everywhere depending on your options for funds. In order for a fund to collapse there would have to be 50 +\- depending on what type of fund you buy a portfolio fund or an individual fund. All the banks would have to collapse. There would have to be an Armageddon and all stores not operating and economic breakdown. Also. You are not buying IG. you are buying things like Costco, WalMart, Epcor, Bell….. Depending on focus of fund. The list is enormous. And we’re you aware that if you use a consultant in IG to work with your money you can never own IG shares. Also if you deal with RBC you cannot own RBC….. Get the picture!! See! All things I learned from my IG consultant!!!!!!

    • Please honestly… which of the following experiences would you chose or avoid??

      My experience at IG from 2000 to 2008

      - initial investment of $50,000 + average $10,000/year in RRSP contributions ($130,000 total)
      - average mutual fund MER 2.8% paid annually over 8 years
      - return of $10,000 after 8 years of IG planning…
      - DSC penalty paid $2500 upon departure
      - total profit $7500 or 5.75% for 8 years of investing

      My experience at RBC from 2009 to 2010

      - initial investment of $137,500 + $20,000/year in RRSP-TFSA contributions ($177,500)
      - average mutual funds MER 1.75% paid annually over 2 years
      - return of $20,000 after 2 years of RBC planning.
      - DSC penatly paid $0 (zero) opon departure
      - total profit $20,000 or 12% for 2 years of investing

      My current DIY low cost self directed account from 2011 to present

      - initial investment of $199,000 + $59,000 in additional RRSP-TFSA contributions
      - Stocks only – average cost currently at 0.45% of total portfolio
      - return to date and total profit of $72,000 or 28% after 2.5 years of DIY investing
      - no mutual funds and no ETF’s.
      - Buy on dips and corrections, blue chip dividend stocks, momentum plays on commodities and currencies, take profits accordingly… stay disciplined.

      I’m a 41 years old self employed man. I spend about 12 hours per week working on my investment strategies. Of course its not easy, I have lost some but obviously my gains have outweighed my losses and thankful. I am cash poor (savings first) and live in a modest home with a small mortgage. To be noted – I had spent 2 years (2009-2010) while an RBC client to study the financial markets. I virtually traded stocks on Google finance to get my feet wet and never looked back. Most people I speak to always say “I don’t have time…” to each his own oh and guess what? An mutual fund salesman has all the time in the world.

      Due your diligence regardless of who and how you invest your hard earned dollars. Just remember this; regretting your investment choices upon retirement age will be much too late.
      Good luck folks

  81. Hi I work with investors group first no matter where you go there is an mer fee second at investors group they do the full plan insurance mortgages investments full plan up to the age of 99 and beyond they help with my estate planning and also with my personal goals I’m confused as to the bad experience that you had they have made me a lot of money good luck

  82. I was with IG as an investor from 2001 to 2010, then I decided to pull everything out and become a full DIY investor using TD Waterhouse as my on-line broker.

    I can tell you that the few years I have been DIY, the experience has been rewarding and comforting. My portfolio bloomed once it had escaped from the oppressively high MERs charged by IG. I have beaten the TSX composite ever since I left IG, something I could never have even dreamed of while in their clutches.

    Looking back on my whole IG experience, I am horrified at the “advice” that I was given and the products I was sold. There was never a basic discussion about asset allocation; I was told to stay away from bonds (during the greatest 10 year bond market in recent history); and I was made to pay $300 to buy or sell a single stock in the portion of the account that I ran myself.

    Once I explained to my advisor that it was time for me to leave, he agreed that I didn’t need any help choosing investments.. in fact my portion of the portfolio was easily outperforming his choices. What then followed was a 4 month horror story where I had to end up making daily phone calls to IG head office to get them to GIVE ME MY MONEY and complete the transfer of the funds ( in cash, which is easiest) to my shiny new TD Waterhouse account. They do not like to give up accounts that run into the high 6 figures, as these are rare, and the MER profit they make on them is significant.

    Finally, with the cash in hand, I planned my asset allocation and invested in a handful of CDN market tracking ETFs, some individual blue-chip dividend paying stocks, and bond ETFs. I only need to spend about an hour a week to manage the portfolio, and I do a monthly performance report and make adjustments to balance assets and geographical exposure depending on the market conditions.

    The bottom line is that managing your own portfolio is not rocket science, though IG and others in the investment industry would have you believe otherwise. If my job depended on you believing this, I suppose I would act the way they do.

    I realize that 95% of the people out there have no interest or inclination to manage their own investments. My advice to them is at least get educated on what you are paying to have this done by someone else.

    • $300 to buy a single stock?!!!! That’s insane. Incredible story. Thanks for sharing. I agree – managing your own portfolio is not rocket science. If you have a minute Kevin, I wouldn’t mind getting your opinion on the free ebook we offer here on the site.

  83. We have been with IG for 12 years and my portfolio started with about 1 million dollars. During the 9/11 disaster we lost about 400,000 and then after 2008, after making it back up to 750 000 we dropped to 350 000 During these times we were supposed to be living off the funds and so withdrew approx. 50-60000 per year. We now stand at 400000. Is this typical of the mutual fund history of clients.

    • As much as I’m not a fan of IG mutual funds, that’s a more a product of the overall market than the specific fund. Isn’t that a pretty aggressive drawdown rate?

      • That’s a product of two things. First, the worst possible time someone could possibly enter into the market. Entered into at the height. Additionally, 9/11 was in 2001, so that was 13 years ago, not 12. If the money was invested before then, could be talking closer to 14.

        So, doing the math (using 12 years), withdrawing $50 to $60K a year, that’s $600K to $700K withdrawn. At worst, that’s breaking even. AT best, a modest gain. If they have in fact been withdrawing for 13 years, closer to $50K to $150K gains.

        That certainly isn’t a good return. But again, market timing is certainly at play there as well. Hard to tell just how much without specifics.

        • Ron,

          I feel your pain, maybe not on the same level but I definitely understand how you feel. The mutual fund sales pitch is purchase for long term, keep buying on a dollar cost average and understand your risk tolerance.

          However many important factors are never highlighted, mentioned or disclosed by the sales representative. IMO most MF reps are just clueless about how markets really work and will sell you whatever big blue is pushing. Others are basically selling you an MER and hope you never find out. A very small portion of MF holders do well, at least from my own experience and what I’ve seen in my 25 years of investing.

          So these ignored factors have tough me alot about eliminating the real market risks. Its funny, every “advisor” will go through a lengthy explanation on how to avoid risk but then recommends to clients 80% equities?!? On top of that, 100% of the client portfolio is exposed to markets offering hardly any protection or cash to buy dips. The MER fee is a killer long term, especially with 1 million dollars, that is $25,000 per year @ 2.5% MER.

          In 2004 my advisor had put me in a US large cap mutual fund when the US/CAN exchange rate was $1.40 Unbelievable… the fund needed to perform 43% for me to only break even! Needless to say that I lost big time on that as well. Too many stories like these unfortunately but we live and learn right?

          Good luck

    • Holy crap! For a high net wroth client they did not take care of you at all. I am soon coming to the end of my 7 year period with IG and will be glad to go. Best thing I did was stop monthly contributions to IG. As long as you are making them then your 7 year period keeps going on and on. About 40% of my RRSP investments are with IG and the rest with TD Waterhouse. I will transfer my IG holdings in kind to TDW once I am free and clear of the 7 yr period and can escape the greedy clutches of IG without penalty. TDW has plenty of no load funds plus you can set up your own portfolio watch online. You can also set stop loss triggers which is what you should have done with your $1M at IG. Sorry you got burned by the crooks at IG but you are not alone.

    • If you have 500K (or at least close) try TD Wealth (Private Investment Advice). This is NOT your typical branch level advisor – these people have good credentials and are a totally separate part of TD Bank.
      I went there after leaving IG and I’m finally making money! I too am drawing a fair chunk out of my portfolio annually (40-50K) but my balance is actually increasing (while currently parking 19% in cash). Bear in mind this is not a `get rich quick` deal – just solid investing.
      No mutual funds, NO DSCs, no pushy salesmen. You have access to investment vehicles that places like IG or any bank advisor could not offer you. Take managed portfolios (sometimes called `mandates`)for example, which give you access to some of the top money managers around. You will have all of the individual stocks, bonds, REITs, etc. in your account as based on the current model portfolio associated with the mandate. Total transparency and at a much more reasonable fee than any managed mutual fund. You can also negotiate fees with your advisor.
      Another example of how these guys are different from IG – if your (TD Wealth) advisor thinks `now` is not the right time to get into an investment, take additional equities for example, the he will tell you so and keep that money aside, deferring any commissions he would have otherwise made.
      BTW – I am not associated with TD Bank or TD Wealth in any way – just a happy customer.

      • No offense, you may be a happy customer, but you’re a clueless one. You are the perfect example of why people need to start doing some research on their own, and know what you’re getting into, even if you’re using an advisor.

        “Managed Portfolios” is just another word for asset allocation type programs. You’ve just bought yourself into a whole group of mutual funds. And you’re MERs, fees, etc, are no different.

        Go to google, type in TD Managed Portfolios, and you’ll find out in about 30 seconds that it’s comprised of mutual funds. Just about every brokerage, and many mutual fund companies, including IG, offer them, with various different labels.

  84. I am loving these arguments.
    IG is a financial planning company, they make their money off of their plans and their customer service they provide for you.
    Banks are banks, they give you advice and provides you with products but they don’t plan for you.
    With all institutions no one is guaranteed to be winning all the time. If You lost money with IG due to their investment decisions, it’s not guaranteed you could have done better with a bank.
    People have the do it your self mentality, sure we are all egotists we all think we are capable of doing things with our vast and comprehensive knowledge in the field right? In reality I really doubt we all have enough time to grasp the intricate details, for the average person it actually reduces your risk of losing money if you have a planner who can at least give you some advice. Saw the ipsos Reid study.
    Also people complain about fees at these institutions. First you really think banks don’t have these fees? Brokers don’t charge you these fees? They all do, but the money you pay should provide you with the service you get. How many times had TD or RBC called you as a client asking for your goals in life and what are you saving up for? Do they tell you how much you are paying them?
    Love some people feeling so self righteous and expecting good customer service at the cost of nothing. There is no such thing as a free lunch. If you don’t want fees do it yourself.
    I know it’s your hard earned money, and when you see the stocks you got are going down, it can rip a hole in your heart; but know this. We are Canadians, we buy high and sell low. That’s why a majority of us aren’t making money on stocks and that’s why we are here complaining. After working with my advisor he told me to keep an eye on the end goal and who cares if the stocks are down? Put more money in, good time for rrsp contribution. The economy is going to end positive in the long run, this way I will buy low and sell high.
    Sure if you are a genius and can cut risk and have great returns, by all means ignore these planning firms. Also send me your number I would love to have you invest for me, I’ll gladly pay you as long as you can make money for me. But I really doubt anyone out there fits they category. Sure you can get lucky, but how many of us has that kind of luck?
    Not saying all these firms are meant for you, you are all people who should be able to make rational decisions (or at least I hope you are ). You should choose what’s right for you what’s not, my advisor told me all the risks I could face with him and without, I decide if I work with him or not. I am assuming those who worked with advisors shares a similar experience, and no one had a gun pointed at their head saying they had to do this and that.
    Just finding all this shifting of fault for our own ignorance unfair.

    • So you’re telling me you have one of the magical advisers that actually chooses funds/products that beat their benchmarks? Statistically very doubtful!

  85. All I am saying is that I have great experience with my advisor. Not saying I am forcing you to get one. Is that wrong, I can’t have a good advisor because I have to be like most people here? That’s some closed minded thinking.

    • Nope, not at all Randoms. I’m saying that if you’re not open to the idea that you advisor is taking quite a chunk out of your returns then it is you who are closing yourself off to a wealth of possibilities er… the possibility of wealth?

  86. When I leave my finances with my planner my results are much better when I did it myself. Besides I see the end numbers I could really careless if he charges more fees.
    Not sure what’s the issue, when I do everything myself management fees are basically the cost of my time. With my limited knowledge if I get lucky great but again I have no luck. With a planner I’d rather pay him the fees which I don’t even see, the end investments earn me more money than I am paying him and I get my time back. Sounds like a good trade.
    But that’s my feeling. If you feel otherwise I am not going to persuade you otherwise.
    All I want to say is I had great success with my planner, wanted to give the other side of the argument considering this post is on saving Generation Y, how are you gona save them when you aren’t providing them sufficient information and biased misinformation?

    • I actually had to laugh at the sufficient information part. We back up everything on here with solid math and then published over 300 comments from all comers – some of which were even IG employees! If that is sufficient information I don’t know what is.

      Your trade off is merely an opinion that you don’t back up with facts. You more or less admit you have no idea of the dollar figure you are paying your figure (“I don’t even see”). How is that relevant information at all?

  87. I have been with my investor for several years now, my portfolio with them have been generally sitting at between 5 to 9 percent growth for the past couple of years. I am moderate conservative so I am have about an 35 65 allocation majority in fixed income. The years at ig my portfolio returns are beating market standard of around 5-6 percent.
    If you are saying simply I don’t provide numbers that I am ignorant of their mer, well I don’t care if their mer 2 or 3 percent, if I had to put my time into doing everything myself I really don’t think u can always get a 5 percent gain anyways
    I feel the trade off is acceptable, I am making money, I am saving time to spend else where why is this wrong? If you got all the time to do your own investments great, again not everyone shares your luxury.
    On your comments if providing a fair point if view, yes you have ig employees speaking, sure but seriously read all the previous posts, pick out those who actually explain it’s perspective and those who are complaining. Can you honestly say people are getting a fair balanced approach to both sides? Also really doubt people share the same enthusiasm as sharing with others their good experience as with complaints. Personally I hear way more complaints these days than people actually saying they are grateful.
    My point of view is whether it’s ig or manulife or banks or anywhere else, so what they charge high mer, I am pretty sure the bottom line for people are making money, spending less time to do it, and knowing they well prepared for retirement, I could careless about their fees. They can charge 3% and if they make me 8% gain so what? I’d rather take that 5% with only 5-10 hrs put into it a year than 5% do it myself and invest hundreds upon hundreds of hours to manage everything myself. Am I wrong?

    • I guess you can make the argument that you are not technically “wrong” in an absolute sense Random. There is a degree of truth to the idea that you are aware you’re paying fees and you are satisfied with the product/service you’re getting in return. I’m making the argument though that I think it’s a really really bad trade for most people. Have you ever calculated what you’ve actually paid in fees? Statistically most Canadians have no idea on real numbers because 2.5% “looks small”. If you look at the sacrificed returns identified in previous comments you might gain a bit of perspective. Would a fee-only product not make much more sense and be much more transparent? If you’re a moderately conservative investor your returns should have been much higher over the past two years to be honest (The 3yr average annual return on the S&P 500 is nearly 17%). Your hesitation to really examine the MER numbers worries me from a consumer perspective. I’m not sure what evidence or theories you’re pointing to when you state things like, ” I really don’t think u can always get a 5 percent gain anyways,” but that leads me to believe you don’t really have a fundamental understanding of long-term investing or how MERs work in the event that your investments lose money several years in a row.

      When it comes to the issue of commenting on the site, I’m not sure I follow your logic. We post what gets submitted. Are we supposed to create false accounts and comments in order to “even things out”? What more can we do to be open and transparent than let the very people that make money from the industry – as well as someone like yourself – post as often as they wish?

      • So what do you propose for the people who apparently aren’t aware of how much 2-3% MERs represent? Don’t pretty much all mutual funds have a management expense tied to them? Is there a way to buy mutual funds without paying an MER, or buy stocks without having to pay a brokerage fee? If people are comfortable sacrificing 2-3% gains to have a professional manage the funds, when they could be banking those gains fees please share with all the secret of the goose who laid the golden fee-free egg.

        • No problem Standard. There is no solid gold goose or egg – well there are – you simple do a little reading on what index funds are. But I realize that isn’t a real solution for people. So instead I recommend paying a fee-only planners – someone who is extremely transparent with what they are offering, and interested in providing a long term plan and then doing simple maintenance. They have no financial incentive to move you into one investment over another – which is huge when you think about it. IF you want to eliminate MER fees while getting easy diversification check out our free eBook on ETFs. The fees on my portfolio now average .08%.

  88. After 10 years with IG I have finally had enough, back in Oct 2013 I advised my Executive Financial Consultant/Adviser that I was going to transfer all my money out of IG.
    He let me know that my total cost for leaving IG would be over $19,000 in DSC’s.
    I asked him if there was anything we could do to lower that amount, he of coarse said NO.
    After doing some research I came across something called SWP – Systematic Withdrawal Plan.
    SWP allows the investor to withdraw 12% yearly, Fee Free! from funds that have DSC’s.
    How the SWP works is you would be able to withdraw 12% off the top of the previous year-end value (for me it would have been Dec 31, 2012)
    So I asked my adviser about SWP, his response was that the SWP would Not help me in what I was trying to do!
    Which was to reduce my DSC’s.
    After educating the arrogant ass on how the SWP works, he picked up the phone and called Head Office to prove to me that I was wrong.
    Within minutes he was apologizing to me, I believe at that point he realized that I wasn’t the naive person he met 10 years ago!

    In Dec 2013 I used the SWP to withdraw 12% & in Jan 2014 I set up another SWP for 3% and then transferred my entire portfolio over to Scotia iTrade, Total DSC’s after the SWP’s over $16,500!!!

    If I decided to do nothing and stay with IG my fees this year would have been at least $15,000.
    Also since switching to ETF’s my fees are now 0.20% compared to 2.58% on average with IG
    Lets see $15,000 vs $1,200/year and my adviser makes nothing from me ever again!

    Over the coarse of the 10 years with IG my Adviser (its killing me to refer him as that because he has never given me Any financial advice over the years, I give him money and he locks me in for 7 years, that’s it)
    I realize everyone needs to make money and I don’t have an issue with that.
    My issue is everything needs to be transparent, the difference in fees between IG Dividend Fund Series A & the ‘no load’ version is 2.4% vs 2.5% and for that huge savings (NOT!) my adviser receives an upfront commission of 3 to 4% and you are locked in for 7 years.

    A few years ago I sold a rental property and handed over $200,000 to my adviser. He made it sound like I would be saving a huge amount in fees if I would lock in, Never telling me it was a measly 0.10% a year in fees. Looking back now and knowing ALL the information I would Never have locked in! I would have instead bought the Same fund BUT the No Load version.
    Lets see hear I save $200 a year in fees and my adviser receives $6,000 to $8,000 in commissions. Win/Win right??? I think NOT.

    I should have known back in Oct 2013 when I had to educate my adviser about the SWP that this wasn’t going to be a smooth transition out of IG.
    Since Oct 2013 the mistakes that have been made is unbelievable!!
    This is what I wanted my adviser to do:

    -Dec 2013 Use the SWP to withdraw 12% across the board on ALL accounts with DSC’s and move the money to the same fund but the ‘No Load” version.

    -Jan 2014 Same as above but the most I was allowed was 3% (3% per quarter) Oh and by the way after phoning 3 different IG’s, head office and my adviser I received 4 different answers!!! on the amount allowed to withdraw in Jan. Just comical
    Try it out for yourself, phone different IG’s and ask the same question and you WILL receive different answers.

    -Middle of Jan 2014 transfer All accounts to Scotia iTrade

    I did All the homework so you would think it would be simple for my adviser to follow though, Right?

    Wrong!!!

    What a mess! LOL I can’t believe I am actually laughing.

    He has admitted to me he messed it up and was going to summit a claim to his errors/omission insurance,
    So he sent me a spread sheet showing the amount I would receive but after taking a closer look at it, I realized the numbers were wrong Again.
    Believe it or not but he said he was getting annoyed with me because I kept finding more of his mistakes! LOL
    I have now really had enough!
    I have contacted the Regional Manager and he has contacted Head Office to start an investigation.

    I would really appropriate some advice from the people who have gone through the investigation process with IG.
    After reading through all the posts here I realize its going to be a long process but I’m ready for a good fight! once I sink my teeth into something look out!

  89. Hang in there Rob,

    My DSC’s were a couple of thousand dollars and I was just glad to pay the penalty to be done with them. My former IG sales representative also told me that SWP’s were not possible… You see this kind of behavior is revealing of their practices, I’m sure some are honest and competent, however the risk of being their client is too high IMO.

    You’re right Kyle, I actually believe that this company has a damage control department or internal policy – a cult mentality where they do and say almost anything to protect their pyramid type business model. Randoms might be one of them and many others from this board. Most of their clients have no clue about finances and investing wisely so how can they end up here with hard headed arguments in favor of high MER’s, DSC’s and less than average performance mutual funds? Makes no sense at all. Look if everyone knew how their compensation structure worked, from “advisor” to division director to upper management, they would avoid them as everybody gets a piece of your money. If you don’t stay in the pyramid long enough you lose money = DSC or long term MER fees. Either way its costs too much.

    The argument about people not having enough time to manage their own investments simply baffles me. If anyone stops to think about how much time they’ve spent shopping for a TV, CAR, APPLIANCES or for anything then why not invest your time in your financial future! Apart from marriage and having children, DIY investing has been the most fulfilling and rewarding experience of my life. I see the world in a different light as I’m much more in touch with our world and how I realize how incredible the human race really is. Seriously I went from a MF sales rep promising me hopes and dreams to taking control of my own destiny in establishing a retirement timeline that I can actually see and understand for myself.

    Financial markets have been on a bull run for a while now so these investment firms are easily achieving acceptable rates of return for the moment. Obviously much less than a fee based advisor and much much less than an astute DIY investor. Above all the security of knowing that your hard earned retirement fund is under your watchful eye day in day out is simply priceless. Actually their is a price, its called an MER and if you dare change your mind that’s called a DSC.

    We’re all very happy that markets are doing well. However does everyone remember 1987, 2001 and 2008-09?? Not for the purpose of doom and gloom but to highlight the benefits of being protected going forward with limited exposor to equity mutual funds. As mentioned above not all of your portfolio needs to be invested at the same time. For myself right now I hold approximately 25% stocks, 25% US Money Fund and 50% in cash. The cash is there for buying opportunities + protection and the US fund is there for US stock purchases where exchange rate fees are waved within this service. Believe it or not my annual rate of return over the last 4 years is 18% since going DIY. The best part is if a correction happens, big or small, my retirement savings won’t disappear or suffer a 60% loss. I can sell and buy stocks instantaneously opposed to calling someone and wait a week to re-balance mutual funds which have already lost significant value. For those who think mutual funds are less risky than stocks – please look up the term “window dressing” at investopedia and simply look at your past portfolios after each correction.

    At the end of the day everyone is entitled to their opinion and this is mine based on my own experiences. It may be different for others who may find value in MER/DCS fee Mutual Funds. Good luck to all

    • I just want there to be some transparency in the market. How can things be efficient when so few people actually understand how much money they are paying every year?

      You raise a great point about shopping for appliances vs understanding your retirement investments. The great thing about a basic “couch potato” or broad-based index portfolio is that I just spent about as much time researching my next smartphone as I will organizing my investments for this quarter – it’s literally that easy once you have the basics down.

    • This still reeks of so many people who really have no idea what is going on.

      SWP – stands for Systematic Withdrawal Plan. I don’t know of any programs where SWP have any bearing on DSC fees whatsoever. It’s just a plan that you can set up, where periodic payments are made from your account to your bank account.

      I think the “discounts” that you refer to, are likely 10% free unit redemptions. Most mutual funds allow for you to redeem 10% of the units you start with at the beginning of the year, free of DSC charge, regardless of whether the DSC schedule is expired or not. Most will redeem those units first, before charging fees. i.e. you can request a 100% redemption, and they will charge DSC on the last 90% only. To be safe, you’re better off requesting a 10% free unit (or better yet, all free unit) redemption first, then redeeming the balance. This is done to allow for some people who are drawing from their accounts on a regular basis.

      As I think was mentioned earlier, if it’s December, it’s great timing. Redeem all free units, then it rolls into January and you get another 10% free. If you don’t redeem in December, the 10% free units do not roll over to the new year.

      If you’re going to transfer out (in cash, not in kind) from anywhere, it’s worthwhile calling the mutual fund companies and asking if you have any free units of any kind.

  90. IG mutual funds are overpriced and often underperforming. IG advisors often have no related education, experience or training.
    Whoever is running this website, and most of the people making comments also seem to lack expertise or even common sense in the area.
    Picking a handful of ETF’s is easy and cheap. However, very few people are able to avoid poor choices, and will cost themselves more in mistakes over time than an egregious MER would cost.
    Personal opinion:
    The average person is better off overpaying an IG advisor (one with some experience and a CFP), than getting financial advice from the internet.
    Feel free to replace IG with any other firm in the above comments.

    • If you actually read the comments TB we’re pretty consistent in saying the problem is more structural in nature and not exclusive to IG. That being said, I disagree with you about overpaying an advisor being the better move. We simple need to do a better job educating people. If we can pass down wisdom on how to buy a used car, we can do the same with a basic low-cost index portfolio.

    • Yes most firms mentioned above are better than IG and that goes without saying. However managing your own investments blindly or with an IG sales rep should never be an option to start with.
      Not sure about ETF’s… Stocks are great and have been my best investment vehicle by far.

  91. Thx Kyle, however Mutual Funds or simply “Funds” give me the willies – too many unknowns and variables for me. Buying a single well researched stock gives me the confidence to invest until the expected profit has been realized. For me, taking profits off the table is productive and gratifying and never again will I buy and hold long term and certainly not mutual funds. A solid correction will come sooner or later, take a look at the historical data and the last 16 years have been a roller coaster ride to say the least. RRSP’s, 401k’s, Pensions… all overexposed to Mutual Funds. To each his own and GLTA

    • Just so we’re both on the same page here DIY Guy – you know that index funds and index-based ETFs are passively managed right? They’re virtually no unknowns (or “unknown unknowns” as the political class would say) or variables. The products track the overall index and are very transparent. They can’t change mid-course even if they wanted to. I agree, market corrections will come and go – likely a dozen or so at least during my investment timeline – but a broadly diversified index fund that covers multiple sectors and geographical considerations will give me much more protection against a downturn then trying to pick stocks will. Of course I will also not have the chance to do exceedingly well like a stock picker would either, but the index vs stock pickers debate doesn’t really have anything to do with RRSPs or mutual funds. All of that being said, if you prefer your method and that’s what motivates you to maintain a study long-term outlook then you’re ahead of most of the game. Cheers.

  92. I apologize for interrupting the IG and industry hate-fest but people need to put things into perspective. If you enjoy spending hours every week researching stocks to pick, then yes you can probably save on fees. No different than if you replace your own brakes on your car. Most people can’t even balance a check book much less plan and invest for their retirement. If you want some real facts, it’s been proven many times that people who use an advisor are significantly wealthier than those that don’t. If you go to Dalbar.com you will see countless studies that prove that active traders/investors earn significantly “less” returns than those that buy and hold. The index returns were 8.21% over the past 20 years and the average investor captured 4.25% of that. That’s half of the actual real return. I find it comical that people are complaining about a fee here and a fee there to try and save 1% of an MER when the average person loses 4% of the actual return.

    • Steve, your creating a straw man argument. The choices aren’t spending hours and hours picking stocks versus 2.5% MER mutual funds, it’s passive index investing using basic ETFs versus the mutual fund argument. The index average you quoted is easily attainable with about two hours of work per year if that. I find it comical that you (just as the financial advisors in this thread) refuse to acknowledge the fact that correlation is not causation. Just because people that cared enough about their money to get an advisor decided to save more than people who had no thoughts about money at all does not mean that the advisor caused the increased savings rate. Statistics 101.

    • Where do you invest your money Steve?….

      Last week’s dip provided a small buying opportunity in great companies that had entered “oversold” territory. In one week I added 6% to my entire portfolio without any serious risks and guarantied profits.

      This strategy has proven to be very successful for me over the last 4 years of DIY investing. Consequently it shortened my retirement timeline by at least 10 years (65 years old to 55 years old) with highly conservative expectations.

      Please Steve, car breaks really? As much as a mechanic can gouge someone its never worth risking your life to save a few dollars per year or maybe a couple of thousand in your life. My time spent picking stocks will save me millions in lost returns imposed by fees and biased advise.

      I agree that not everyone can do this and that is really unfortunate for those people. Good luck to them

Leave a reply

Headline Name: Email: subscribed: 0 We respect your privacy Email Marketingby GetResponse
Headline Name: Email: subscribed: 0 We respect your privacy Email Marketingby GetResponse