[Shekelstein]

So yeah I want to ditch my financial advisor to lower my investing fees. I'm with Imperial Service, got about 332k in a cibc monthly income fund I'm gonna try to replicate this portfolio by using index funds. Also have about 47k in a TFSA mutual fund

I was wondering, should I go with IE and stay with CIBC or should I try another broker? I'm not really looking to do anything daring. I'm mostly gonna just rebalance things once or twice a year. Not really gonna be making any new contributions to this fund anytime soon because I'm living paycheck to paycheck.

Also is there anything I should look out for when I tell them I want to do self-directed investing? Is the bank gonna try to screw me over in any kind of way?

 

[avrex]

Yep, just go ahead and open up a CIBC discount broker account (called Investor's Edge)
If you are happy with CIBC overall, there's no need to change banks for your discount broker, as most of the Cdn bank discount brokers are about the same.

Once you have the account, it's time to move/sell your CIBC Monthly Income Fund (MER 1.47%) and invest in a low-fee Couch Potato ETF portfolio.

 

[Potato]

IMHO it's not really going to matter. If you're at CIBC, and aside from the fees you're paying for your advisor you're happy with the service, then staying will be a fine choice. The brokerages are quite competitive and the differences are minor: Questrade will save you some money by allowing cheap/free ETF purchases; some handle US funds/Norbert's gambit more smoothly; TD offers e-series; etc.

 

[Oldroe]

You don't really tell them, you open your new account and send a request for funds. "In Kind" will send the fund. You need to look into front load or back load funds. It's likely back load and there will be % deducted starting about 8% and moving down.

 

[RBull]

Ditto all of the above. Just open your self directed account at CIBC IE first and get the proper forms to transfer the existing funds "in kind". You can decide when/what to sell and then what/when to buy after the account is open and transfer complete. Selling mutual funds won't cost you anything, and no the bank shouldn't "screw you over" in any way.

I don't think there are any loads (fees) associated with selling your current fund, but double check this before selling. Most banks don't have them with their own mutual funds. You have enough $$ where a couch potato ETF approach would be a cost effective approach, and likely save you ~$4K+ a year. AVREX gave you the link if you haven't already looked into this.

Good luck.

 

[Cal]

The only thing I would check prior to sending the request to transfer funds form, would be what the penalty would or could be. Normally if you haven't held the funds for 5 years or something there can be a % penalty....so perhaps you can keep just a few more $ if you send the transfer form after a certain date, depending upon when the funds were initially invested....otherwise good luck!

Welcome to the forum.

 

[Shekelstein]

You don't really tell them, you open your new account and send a request for funds. "In Kind" will send the fund. You need to look into front load or back load funds. It's likely back load and there will be % deducted starting about 8% and moving down.

The only thing I would check prior to sending the request to transfer funds form, would be what the penalty would or could be. Normally if you haven't held the funds for 5 years or something there can be a % penalty....so perhaps you can keep just a few more $ if you send the transfer form after a certain date, depending upon when the funds were initially invested....otherwise good luck!

Welcome to the forum.

Ditto all of the above. Just open your self directed account at CIBC IE first and get the proper forms to transfer the existing funds "in kind". You can decide when/what to sell and then what/when to buy after the account is open and transfer complete. Selling mutual funds won't cost you anything, and no the bank shouldn't "screw you over" in any way.

I don't think there are any loads (fees) associated with selling your current fund, but double check this before selling. Most banks don't have them with their own mutual funds. You have enough $$ where a couch potato ETF approach would be a cost effective approach, and likely save you ~$4K+ a year. AVREX gave you the link if you haven't already looked into this.

Good luck.

Just to make sure, should I find out about deferred sales charges/backend fees before I open my IE account? I'm assuming it might be a better idea than opening the account and then asking about the fees before transfering because there might be fees for IE if I don't the minimum amount in there? Also, should I ask about the fees to my Imperial Service advisor or should I just call customer service? I just want to avoid having the guy trying to convince me to stay with him and any awkward moments that might result from it.

 

[RBull]

Just to make sure, should I find out about deferred sales charges/backend fees before I open my IE account? I'm assuming it might be a better idea than opening the account and then asking about the fees before transfering because there might be fees for IE if I don't the minimum amount in there? Also, should I ask about the fees to my Imperial Service advisor or should I just call customer service? I just want to avoid having the guy trying to convince me to stay with him and any awkward moments that might result from it.

You don't need to speak to your bank advisor if you don't want to. Just open the IE account and have funds transferred in kind. There are NO ACCOUNT FEES on balances over $25K and you can confirm this when you open account, and that your fund is a CIBC no load fund (IT IS) which means no sales charges - front or deferred. See links below. While waiting for the funds to transfer (probably 1-3 weeks, but maybe faster within same company) you can decide what you want to do with selling/buying other low cost funds. Don't worry, it's straightforward and you're taking the right steps to lower expenses and increase net return to yourself.

This are the answers for you here:

https://www.imperialinvestor.cibc.com/iis/about-us/fees-and-commissions.html

https://www.cibc.com/ca/mutual-funds/rprt-gvrnc.html
Go to simplified prospectus, download PDF and go to page 22 & 23 re charges-NONE

http://quote.morningstar.ca/quicktakes/fund/f_ca.aspx?t=F0CAN05LVX&region=can&culture=en-CA

Good luck.

 

[Shekelstein]

Cool I just took a look at those links you gave me, it was real useful. I sent my applicatiIon to open my account with IE and I'll be transfering everything over once the account is open.

I was wondering. Do people who make the switch to DIY investing usually sell everything in one shot once they make the move? It seems like it would kill me with capital gain taxes. I'm guessing in the long run of course, having a lower MER would end up getting you better returns than you would get with your old products, but does the sale of your old stuff have to be done as soon as possible all at once?

 

[My Own Advisor]

I know when I moved to DIY investing, I took my time to sell off assets (i.e., mutual funds) and convert those to ETFs and individual stocks.

I can't tell you HOW HAPPY I am to have done it - never looked back

I did it slowly, over many months, as I learned, looked forward, and read up about what to do, what not to do.

Re: but does the sale of your old stuff have to be done as soon as possible all at once?

You won't have to worry about capital gains if all your assets are inside registered accounts (e.g., RRSP). If your RRSP and TFSA are maxed out, which is great, then yes, this might be a concern.

You can stay with CIBC IE for now.

 

[mf4361]

Cool I just took a look at those links you gave me, it was real useful. I sent my applicatiIon to open my account with IE and I'll be transfering everything over once the account is open.

I was wondering. Do people who make the switch to DIY investing usually sell everything in one shot once they make the move? It seems like it would kill me with capital gain taxes. I'm guessing in the long run of course, having a lower MER would end up getting you better returns than you would get with your old products, but does the sale of your old stuff have to be done as soon as possible all at once?

Capital gain tax is not an issue unless you spread the sells throughout multiple years (tax return is annually)

Selling the portfolio over a longer period of time can spread out the risk of price changes. (e.g. it might gain right after you sell all of it) But if you are buying the same underlying securities, just in ETFs, shortly after you sell it, it should not make a big difference.
E.g. I sold all my VUN, XEF, XEC and buy VXC with the money I get from it the same day. Return has been very similar between the two. I was doing it within TFSA, so tax is not a concern at all.