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Hello,

I recently moved from “typical” DSC commission based financial advisor to one that charges based on a percent of assets for a few reasons: 1) more objective advice; 2) transparency of fees; and 3) cost. Although I believe I have gained more objective advice and I have a better sense of what I’m paying, I really don’t think I’m saving more in total costs once I add the MER + 1.5% advisory fee.

More specially, I’m currently paying 1.5% advisory fee on top of the MERs associated with ETFs and F-Class series funds. F-Class series funds were emphasized to me as being “cheap”; however, when I add the 1.5% advisory fee on top of it, they sometimes exceed the typical (DSC based) class of it? :confused:

I’m just interested in some opinions – as I don’t see a lot of discussion about F-Class funds.


I realize that I can lower the total cost if I shift more money from F-Class funds to ETFs. I also realize that the 1.5% can be negotiable; however, I don’t have enough invested right now to negotiate.
 

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Dear 2216, not sure if you are still around but if you are, IMHO you are paying too much for your mutual funds.
An F class fund is simply one that has the advisor kick-back fee removed and payable as a separate item.
The following informational article explains that on average an F-class is expected to be between 45 and 110 bps lower than the same A class fund.
http://www.professionalreferrals.ca/2005/03/mutual-funds-the-f-class/
Therefore, if you are paying more than that in direct advice fees, you are paying too much.
Of course, the advice may be worth more to you but that's something only you can judge for yourself.

Since in your own words, you do not have substantial enough investment capital to get an advisor excited and take notice, it may be better for you to go with a broad based equity index like the XIC or similar.
 
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