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?
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.
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. =)
[...] at Young and Thrifty presents Me, Myself, and Investor’s Group, saying “A post detailing my experience with a financial adviser and youngandthrifty’s [...]
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!
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.
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.
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
@J- Oh dear.. have you spoken to them about this?
Thank you for your reply. We will see how it goes and post back!
@Issa- Great! Thanks so much.
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.
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!
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.
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)?
[...] I initially signed for the BMO Investorline account, it was when I was escaping Investor’s Group. BMO told me that I should amalgamate my bank accounts with a family member so that the total [...]
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.
http://www.theglobeandmail.com/globe-investor/personal-finance/ted-rechtshaffen/is-your-adviser-simply-churning-your-funds/article2029571/
@AP- Cool, thanks. That’s disgraceful that some mutual fund advisors practice that.
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.
[...] though you have to be cognizant that some of the MER’s can be as high as 3.2%. For example, Investors Group is one of [...]
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?
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.
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.
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
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
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.
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.
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!!
Hi, could you please tell me the interest rate for a TFSA with IG? Can’t seem to find it on their site…?
Thanks,
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).
@NR485- That’s good that they didn’t sound like they pressured you into moving your investments from CIBC!
@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.
@NR485- It is difficult to “fact check” when you don’t have access to the facts/ information right away, unless they actually showed the performance to you. Have you tried Globe Fund yet? It shows all the funds and their performance:
http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/
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.
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.
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
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.
@Jacqueline- Ouch.. Have you tried talking to a lawyer who is experienced with investments and wills?
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.
@David- Thanks for that fantastic comment!!! Very helpful for me and the readers out there
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.
http://www.train2invest.com/blog/
Check out this blog for more information
@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
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).
Sounds like an Ig salesmen. He buddy, sell me ph and n!!!!
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.
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
@j- lol, I love your passion! I guess the moral of the story is, if you want truly “unbiased” advice, seek a fee only financial advisor!
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.
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.
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….
Matthew,
You need to read my comments above.
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….
@Sandra-
Isn’t he not allowed to switch your funds because you filled out a risk profile in the first place?
The Financial Post’s John Chevreau wrote a great piece recently on Investor’s Group- definitely worth a read:
http://opinion.financialpost.com/2011/12/01/ok-investors-group-now-the-gloves-are-off/
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
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
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..
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.
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.
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.
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.
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.
You sir, are a liar.
Sorry IG,
You need to re-read my comments the software (IG) is using can be got off the web for “free”.
If you have the guts, why don’t you tell us who you are, your experience etc?
Brian
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
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
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
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
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!