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After reading the MDJ post today it got me thinking about my financial planner.

I've always been a saver and a chicken to invest. When the market crashed I took hold of the opportunity but I went to a financial planner to do it. My parents have been dealing with the same mortgage broker for the last 20 years so I asked him to recommend someone to me rather than just wandering into a bank or something. The financial planner he recommended me to suggested a lot of CIBC mutual funds because CIBC would waive transaction fees and annual fees -- and more likely because he works through CIBC. In the year that I've been with him, the return on my RRSP has been 19%. Not as good as I could've had in 2009 but a lot better than the 1% I was getting in my savings account! I'll be using this for the HBP later on this year.

My TFSA, also in a mutual fund, gained 24% over the last 14 months.

The only non mutual fund he suggested was the Dollarama IPO which only represents a very tiny portion of my portfolio.

As I don't know a lot about financial planners and only have a general idea about how they make their money, I'm always concerned that he's more of a salesman and he's looking out for himself.

I have a chunk of cash ready to go into investments but I know if I bring it to him he'll suggest more mutual funds and I'm not sure if that is the right way to go. If I suggest equities he will obey, but the transaction fees that I'll be charged are insane.

So, what do you think of financial planners? What do you think of this financial planner? Is there something specific a financial planner should do? Let me know if you need more details.
 

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With my RSPs, all of my mutual fund choices (about 4) ended up outperforming all of his choices (about 4) over the ensuing ten years. No financial planner other than my dad has ever given me good advice.

Anything can happen in one year, but over the long term index funds outperform most other mutual funds because they have low MERs. The bank funds are typically no load. So overall, they likely take less than if you buy other mutual funds.

An IPO is a strange choice from your point of view, as your only stock pick. Why not choose a dividend aristocrat if you are only going to buy one stock? Maybe he is getting a bonus for helping to launch it.
 

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Financial planner != investment advisor. He should also be working with you on your financial goals.

Without knowing the specific funds, it's hard to say whether he's having you buy cost-appropriate funds or merely looking for funds that generate large commissions for him. If you're not comfortable investing on your own (and doing lots and lots and lots of research), financial advisors can be a good way to go. You should still educate yourself about how MFs work, so you can at least spot if/when someone is trying to take advantage of you and you know what questions to ask.
 

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If the money is to be used for HBP later this year then I would suggest it shouldn't be in equities at all - what if there is a big crash?

I don't know if you the planner of your plans for the money but if he knows you are going to withdraw it all (or $25k of it) then that portion should be in something guaranteed.
 

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I think having 1 financial planner is a mistake. You hear over and over about people losing everything with 1 financial planner.
 

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If you are putting your faith blindly into someone else without doing your own homework, its a recipe for success. I would suggest you increase your financial literacy, so you can at least talk intelligently with him and understand why he is suggesting you to invest in certain funds...if it looks fishy call him on it. I don't think any investment advisors have any additional magical tools that makes them superior. Read up on the basics, learn your ratios, understand where the market is going and you can make some decent money without advisors.
 
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