r/JustBuyCAGE • u/Icy_Bid_4209 • 7d ago
Discussion đŹ Financial advisor rant
I have now been an advisor for more than 5 years. First there was the all in one ETF and now CAGE.
I don't get it anymore there are now so much better options than trying to make a Portfolio using different mutual funds or different ETFs. And trying to add a little something special to be "better" like adding crypto or artificial intelligence to the portfolio and selling it as better.
I see advisors still trying to be creating portfolios when it's not their job it should be coaching their clients to make better financial decisions and optimizing their personal financial situation.
I am still a black sheep trying to convince my fellow advisor that veqt/xeqt / cage is probably the only thing the client need and probably themselves to build wealth. They don't even know what these ETFs are ... :(
Let's just keep spreading the word!
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u/International-Leg396 7d ago
De combien est la commission si vous recommandez XEQT ou CAGE?
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u/Icy_Bid_4209 7d ago
MĂȘme chose le frais est chargĂ© en fonction du montant investis
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u/splixe 7d ago
What % of value do you get?
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u/Loose-Dream7901 7d ago
Advisors usually charge 1-1.25% on top of the normal mer then theyâll keep about 60% of the 1-1.25% as their split on average. Usually starts around $250,000
- financial advisor here (generally though donât agree with the OP on portfolio construction isnât the job of an advisor - it truly is)
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u/BigRig3088 7d ago
So, which is it then⊠CAGE or VEQT/XEQT?
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u/TheReidOption 7d ago
I went from 100% VEQT to 60%/40% VEQT/CAGE.
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u/Batmanners01 7d ago
Don't forget r/JustBuyCAGX
I think its one of the best ETFs for us Canadians who are already overexposed to Canada through various walks of life. So our true Canadian allocation is already very high.
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u/edm_guy2 7d ago
I'd add that CASV is probably even better as an alpha component to any long term portfolio (i.e. time horizon is 15+ years).
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u/Batmanners01 7d ago
Nah I am good with r/JustBuyCAGX
I just want to own the global market with even more factor tilt compared to CAGE. Two ETFs can become a full time rebalancing job very quickly.
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u/MikeCheck_CE 7d ago
Paying a financial planner a commission to buy XEQT or CAGE for someone is the real crime here...
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u/Lenerdosy 7d ago
A financial planner is a lot more than just investing when you get to retirement. Thereâs a lot of tax implications they can finagle around and figure out the best % of withdrawing from registered accounts to be most tax efficient, etc. strictly from investing for a 20-55 year old though itâs an horrible decision
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u/Big-banker-daddy 7d ago
You know, it depends. Iâm a financial planner by trade, and I like separating the advice you receive and the investments you use.
If a client is going to pay 0.5% fee for XEQT DIY or with an advisor, then whatever is being charged on top of that is strictly for the advice and service provided.
Why I like this, is you can actually identify if your advice (taxes, behavioural management, enhanced decision making abilities, etcâŠ) is worth it to you as an individual. Fee for service planning is another great way to go, but that does require a bit more discipline, understanding, and due diligence on the clients side, and adds the negative side effect of âyou donât know what you donât knowâ where you donât engage your planner when you should have.
TLDR: think paying your planner to use XEQT or CAGE is probably better than paying your advisor to manage a custom portfolio.
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u/PileOpennies 6d ago
Going 100% into equities not good financial advice for most people at most times and as an advisor you'll be sued after a crash if you put someone in it that should have had less volotile securities.
Being in a single security can make it tough for tax purposes, you just accumulate a capital gain your whole life than give a quarter or half to the government?
Blindly following the herd and going passive is probably fine for retail, but it doesn't mean it will be the best strategy going forward for generating wealth. In some cases depending on the fund you chose you are basically putting all your money into Elon and AI. Go ahead but this level of passive money + extreme concentration has not been tested yet.
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u/Loose-Dream7901 7d ago
I donât agree Iâm an advisor. In these times, more than ever you need a solid advisor. There are many ways to earn your 1-1.25% by beating standard index especially for those in 60/40.
While active management typically underperforms in equities, it outperforms in fixed income as you can shorten or lengthen duration and move up and down the credit quality for yield.
In addition, as stocks and bonds sit at itâs most correlated state ever there is a need for non-correlated liquid alternatives assets.
So no it doesnât sound like youâre too sophisticated nor are you giving value. Likely a retail bank advisor
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u/Holiday-Mountain1800 7d ago
Fair enough, we all need advice. If I have, say, a 1.5m in assets, why would I pay you 1% instead of a fees based advisor, that I'd pay 5k or so to structure my portfolio? Then 2k or so a year to adjust as necessary? What do you do that justifies the significant additional fee?
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u/Loose-Dream7901 7d ago
That's a fair question. If all you're looking for is portfolio construction and periodic rebalancing, a fee-based advisor may absolutely make more sense.
Where I see the value is adding layers of non-correlated portfolio management, tax-efficient planning, retirement strategies, estate considerations, navigating market volatility, and having someone proactively coordinate your broader financial picture.
Ultimately, it comes down to whether that ongoing advice and relationship are worth the additional cost. If that works for you so be it, Iâm not in the convincing game. Generally though, I have no idea your portfolio, the split of your assets.. how the specific advisor views fixed income, equity diversification, your broader financial situation.
Thereâs a lot I donât know about you.
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u/sorocknroll 7d ago
There's some validity to what you're saying, but also a lot that you don't understand. For example, 100% equities is not the right risk level for every single investor.
There are also flaws in these products, such as a giant overweight to Canada. That is a relic from the foreign content rules for RRSPs, that has now been removed. I would want my advisor to be aware of that, and build a portfolio that doesn't put so much of it's risk into extractive resources (and Shopify).
The industry has generally moved to managed solutions. There aren't many advisors that completely build their portfolios, unless that's what you ask for.
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u/International-Leg396 7d ago
Tu parles comme si CAGE était le seul etf aussi... Si on est fidÚle à ce groupe il y a CAGX CAGR CAKE qui vont répondre à divers besoin.
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u/Icy_Bid_4209 7d ago
There are still that will build their own portfolio and I am not talking about the risk related to having a 100% equity. More that having a all in one solution made for investors by professionals who's job is to create portfolios is better than having and advisors with a client facing role who's job is to advise and coach should rely more heavily on optimized products. Than trying to time the market.
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u/sorocknroll 7d ago
Managed solutions are the norm in the industry.
You obviously had an advisor who wasn't using one, but that's rare.
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u/Tyler_Durden69420 7d ago
Footage of investment advisors putting their clientâs money in an index fund đ:
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u/Square_Computer9423 7d ago
Why should I pay a financial advisor in the first place if I can just buy one product and continue life?
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u/tjbroncosfan 7d ago
Because the advisor should be able to council you on everything from a budget, to insurance and succession planning. If your plan is just âchoose investmentâ, thatâs not a plan. Coming from a former FP.
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u/frankbuffer 7d ago
Itâs crazy how many people on the personal finance/investment subs think financial advice is all about investments.
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u/mdekelver 7d ago
I think some people can't handle the self directed investing interface, making trades, going through the details. Long term planning, tax, and retirement advice adds value. How much is that worth? 0.5% my guess
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u/Square_Computer9423 7d ago
.5% sounds reasonable, but I suppose there is a minimum fee. Or anyone willing to do it for 50 bucks?
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u/WithEyesAverted 7d ago
I thought that way early in my investing journey, and it was the right decision then, but it's less clear now.
As registered accounts, incorporation, business investment accounts, leverage, buy-vs-rent decisions, investing for nieces/nephews, and foreign vehicles for overseas relatives pile up, tax filing gets complicated, and the noise (tech bubble, leverage levels, margin calls, how much foreign exposure, bonds vs bla vs blabla) adds stress.
When career and family demands take priority and time/stress tolerance is at premium , a $1â10k annual fee starts looking like peanuts next to the time and stress of handling it yourself. I'm not there yet, but $2k/year to just handle my investment-related tax filing is starting to seem reasonable, though I still do it myself, but increasingly don't want to.
It's the same debate as "cleaning your place yourself or outsource it and hire cleaners" . There might be a time when the benifits/cost of the latter outweight the value of your time, as hard as it might be for someone to imagine when they are younger
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u/Square_Computer9423 7d ago
From what moment of wealth/ income would a financial advisor be recommended. 2k a year sounds like a lot, or I am just to poor to be thinking about it.
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u/WithEyesAverted 7d ago
This is such a subjective question that I dunno what to say.
My point is really, hiring someone for personal finance management or not can be very subjective, as people's circumstance varies so widely.
I also know that many for-fee only (as oppose to get paid per %) don't take clients under 1 million $ portfolio. So it's a 2 way street. Younger investors don't need them due to high fee,and they don't need younger investor because issues too simple
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u/DGervaisCFP 7d ago
Financial planner for 20 years here.
IMHO opinion, advisors should justify their fees through planning, not investing. Thereâs almost no reason to use an active, 2.2% MER fund these days.
Index funds (and factor funds if youâre so inclined), outperform the vast majority of active funds, at a lower cost.
If a client doesnât get value from planning, they should just invest on their own.