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Discussion Starter #1
I have been very fortunate to sell my construction company (just before Covid hit), and have gone from being dirt poor to assets in the tune of 7m. I'm now hunting around for a decent financial advisor, preferably fee only, to get an insight into asset, tax, estate planning etc.

I've always had a faith in Andrew Hallam's advice, and the little money I did have earlier got invested in Vanguard index funds. The question I'd like to put out there is whether or not I should continue in putting my money into a fund like VBAL or VGRO? My wife is on my back and wanting to go with an RBC asset management company to manage the money, her parents have invested with them for years and have had good returns, but with that comes the high MERs.

Fresh perspectives would be very much appreciated.
 

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Just because you use a specific financial advisor doesn’t mean you should abdicate your responsibility. No one will care more about your money than you will, so learn about your investments before blindly agreeing to them. You don’t have to invest with mutual funds to use RBC, you can stock pick. You also shouldn’t buy whatever you’re told to.
 

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Take your wife's advice and go with RBC asset management.

As you stated, you are also in need of tax and estate planning services. High net worth asset managers will diversify and optimize your portfolio accordingly.

Your main focus at this point should be capital preservation.
 

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Agreed. I would guess you’d be paying less than 1% in fees. And the fees would likely be deductible when assets are held in a non-reg account. Don’t be afraid to ask the advisor why you shouldn’t go with vgro instead. Paying 1% on a large amount will still feel like a big expense. If you’re the type to question why the portfolio is own 10%, while you pay 1%.....then stick the money at SIMPLII and earn 2%....and continue to chase the promotional rates.
kidding.....but not an absolute mistake.
 

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That size of portfolio will likely hold some RBC shares, so you are paying yourself with the fees.

Don't forget to tell them you want a nice birthday cake delivered every year.

I know a guy who actually did that at Raymond James and every year he got a really nice cake brought to his home......LOL

It might sound silly, but the guy said he wanted to "remind" his advisor every year that they had "his" money.
 

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Honestly I disagree with the above. My mom pays a TD wealth manager and it costs like $30k+ per year, I don't feel she gets her money's worth at all. The reason she stays with him is she feels more comfortable having someone managing it. But I feel like in today's environment of one-stop index funds like VGRO/VBAL you don't need that.

For the tax and estate planning you can pay an accountant/lawyer for advice and still come out way ahead of using a fancy wealth manager.
 

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Discussion Starter #7
Thanks for the opinions guys. Been thinking a lot about this. Where I’m at right now if first of all talking to an independent advisor, and get his angle.

Right now I’m leaning towards dividing the money 75% going to the RBC Investment Company, and 25% being a split between VGRO and VBAL. Which would give me a nice benchmark to compare the two.
 

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If you’re comfortable doing it, then do it all. To me, the primary objective of going with a money manager should NOT be performance. To me, their primary value is to assist people who don’t have the time or inclination. Could be doctors, busy entrepreneurs, seniors with no experience.

if you’re happy with “benchmark” performance (ie, the broad market), then forgo the professional money manager. Get in front of a good accountant and tax/estate lawyer though.
 

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Discussion Starter #9
I agree with you. I should not be choosing an manager for just performance. And to be honest, if it was just me, I would probably just stick the lot in Vanguard index ETFs and be done with it. But convincing my wife that this is the best thing to do will be a challenge.

Im going to see Macdonald, Shymko & Company next week to see how they would approach it


I’m also going to see Philips, Hagar, and North too, to see what their fee structure looks like

 

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Make sure you find out where they make their money from. If it’s from the same investments they advise that’s a lot better than commissions on what they sell.
 

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All the Big Banks have Private Banking/Wealth Management options available. With $7 M to invest, all fees (and preferred lending rates on things like mortgages/LOC) are negotiable. The old paradigm of you as "Borrower" has changed to you as "Buyer", which are two very different things!

And as Sags pointed out "you are also in need of tax and estate planning services. High net worth asset managers will diversify and optimize your portfolio accordingly". These specialists should be included in your overall package.

Like everything, always meet with more than one service provider, as things vary greatly - and you can play one against the other to get a better deal - especially if you are switching to a new financial institution. And I would be very surprised if you end up paying more than 0.75% to 0.50% (blended) if you choose to have the whole $7 M managed at one institution.

(And if I may be so bold: take your wife to the meetings so she hears first hand what is being said. Some of the "professionals" you meet with will leave you shaking your head in disbelief).
 

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I would wonder......perhaps based on an illogical fear, what would happen if there was a global financial collapse ?

It isn't entirely beyond the realm of possibility. The world came to within a few minutes of a total financial collapse in 2008.

Quickly organized late Sunday night meetings among the US government and big global bankers kept the world from tumbling over the edge.

Governments have demonstrated they would bail out banks at all cost. Would they bail out private investment firms as readily ?

Lest the world forget........https://www.thebalance.com/2008-financial-crisis-3305679
 

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Discussion Starter #14
That is a genuine concern. I'm pretty sure if it happened again, there would be less sympathy on the lower end of the banking foodchain.

I may be incorrect, but that's why I was thinking of putting a portion of it within Index funds that have the potential to bounce back after the storm, rather than wiped out along with the management company.



I would wonder......perhaps based on an illogical fear, what would happen if there was a global financial collapse ?

It isn't entirely beyond the realm of possibility. The world came to within a few minutes of a total financial collapse in 2008.

Quickly organized late Sunday night meetings among the US government and big global bankers kept the world from tumbling over the edge.

Governments have demonstrated they would bail out banks at all cost. Would they bail out private investment firms as readily ?

Lest the world forget........https://www.thebalance.com/2008-financial-crisis-3305679
 
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