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?

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