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No surprise.

It happens because people let it happen. For some reason they trust banks. I have never been certain why. Investing does not have to be complex. With just a little reading or work you can get the basics. Alas, many people spend more time investigating what TV or washing machine to buy than they do looking after their investments/retirement money.

That is where the banks come in. They take advantage of that and pretend that they have expertise. They don't. As the article says, they do not advise, they sell. And they sell what they are told to, what gives them the most credit, the most bonus.

Trust our banks? Who's kidding whom? The bank looks after the bank, not the customer.
 

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No surprise.

It happens because people let it happen. For some reason they trust banks. I have never been certain why. Investing does not have to be complex. With just a little reading or work you can get the basics. Alas, many people spend more time investigating what TV or washing machine to buy than they do looking after their investments/retirement money.

That is where the banks come in. They take advantage of that and pretend that they have expertise. They don't. As the article says, they do not advise, they sell. And they sell what they are told to, what gives them the most credit, the most bonus.

Trust our banks? Who's kidding whom? The bank looks after the bank, not the customer.
... but they're titled as "financial advisors", supposedly to "advise" but then there is that now revealed distinction of being an "advisor" who doesn't "advise" ... kind of misleading, don't you think? Or does a layman have to go to the regulators' website and search up all these fancy titles to determine who can ctually can advise and who can't? Moreover, shouldn't the bank be in a position of "trust"? At least, Canadian banks that Canadians are so proud of - or shareholders, I should say.

In this case, I'm surprised that there is no mention of a KYC form being signed prior to selling him the mutual funds.
 

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Visit some retail stores, car dealerships. They have lots of sales advisors and many are called exactly that. That still does not preclude folks from doing a little research on their own.

Even reading the documentation from the bank with an eye to the MER's etc. would help. The banks must rub their hands in glee during RSP season. All those people focussed on getting a tax refund with little or no attention paid to the product or the return. Banks have a great business. Take your money, earn 3 percent MER on many products. You may or may not make as much or even loose money...the bank gets their 3 points off the top no matter what. It is a great business model. It is why I like bank stocks.
 

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It's your own money... and a lot of money at that. Take a few days/weeks to learn how to manage it or at least understand what is being sold to you before you decide to sign up. My pity rating for this is pretty low. He's a grown man. It's his responsibility to understand what he's signing up for.
 

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Me too. Especially since he went along with this gag for six years. Go figure.

The upside to the story is that he woke up, smelled the roses (or perhaps the fertilizer) and make his experience public so that others may wake up.

The only person who cares about your money is you.
 

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No surprise.

It happens because people let it happen. For some reason they trust banks. I have never been certain why. Investing does not have to be complex. With just a little reading or work you can get the basics. Alas, many people spend more time investigating what TV or washing machine to buy than they do looking after their investments/retirement money.
Agreed ... people seem to treat finances as something that can't be learned versus say car repairs. I have never understood why as people learn some complex stuff as part of their hobby.


Cheers
 

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i feel no sympathy for the man in the article. he is seeing that he couldve gotten better gains but probably went into a conservative portfolio and now is salty.

honestly people just dont hold themselves accountable anymore - he signed the docs, you are telling me he didn't check or update in 6 years? please....
 

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With the size portfolio this retiree had, he should have spent some time and money on investment books. Even reading Moneysense would have led him away from bank advisors and towards couch potato. He says he paid 30K over the last 6 years but I think with 1 million invested at 2.5% or so MER, it could be more like 30,000 annually, no?

http://www.cbc.ca/news/canada/british-columbia/bank-s-deceptive-titles-put-investments-at-risk-1.4044702
yeah that is strange, would be that annually rather than over 6 years.
 

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Investing does not have to be complex....
According to a TV bank commercial I saw last night, "Investing is complex"... who knew? The poor consumer moron in the commercial was inundated with complicated ideas like "buy low, sell high", so the only solution was to allow his bank to take over his investments.

Bank commercials in the last few years have made it quite clear that consumers are idiots and they shouldn't be messing around with complex things like investing. "I moved a few things around and saved you $1500". Now you can go out and blow that money I found hiding in your account. "You're richer than you think".

The majority of investors would do well to simply invest in a couch potato index strategy. They would easily best any bank advisor route many times over. These people are not interested in learning about investing, so basic index solutions will serve them well.

If you are someone who wants to learn a little and you're not a hapless idiot, you could beat that index portfolio quite handily (another investing wives tale that it's pointless to try and beat the index), but most aren't interested in investing details.

ltr
 

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The sad thing is that the situation in the article is far from unique. Your average Joe just has no interest in learning even the basics about investing. We spend 40 hours a week working for our money, but most can't be bothered to spend 1 or 2 hours a week to learn how to make that money work for them. How many people out there still think a TFSA is just some fancy savings account? If they can't figure that out, how are they going to know the difference between an Advisor and and Adviser?

Well, gotta run, I'm off to meet with my trusty local automobile investment advisor. He's got a great new Ferrari that he says will be a perfect fit for the transportation needs of my growing family. :playful:
 

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Yeah, that's the one. Well, so it wasn't a big 5 bank. Whatever. The message is clear. There's no way anyone can invest without help. Investing is complicated. The big 5 must love this tactic.

ltr
It is not just the financial industry-EVERYTHING is like that-if there is money to be made you will be lied to-this is why there is this continual push to "regulate" (shut down) speech on the Internet-the truth is a problem if it interferes with taking your money.
 

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Or does a layman have to go to the regulators' website and search up all these fancy titles to determine who can ctually can advise and who can't?
if you want to spin it that way, then here's a devil's advocate question -
does a millionaire just blindly follow a bank's employee with his million dollars for 6 years?

leading questions can turn the argument whichever way you want it to. fact of the matter is - if one is investing a huge amount, then one needs to to do the due diligence. people research when they buy car, house, expensive appliances even if there are salesmen to advise and answer your question. you dont give your money and say give me the best car or appliance. investing should be similar, do your research.
 

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Unfortunately I don't find this surprising. I'm continually surprised at how little interest people show in their finances. i guess I shouldn't be b/c up to about 3 years ago i wasn't really either. Reading the money sense guide to the perfect portfolio and playing with a compound interest calculator really was an epiphany for me. It also made me pretty made, not only for me but at how the Canadian government is all but complicit with the Financial industry to fleece the Canadian public.

For example, why do RESPs even exist? Why not just give the cash directly to universities and lower tuition? Why not expand CPP even further? why does a single mom waitress have to learn how to invest in index funds to ensure that her savings are appropriately managed? it's maddening.
 

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It comes down to people taking a little responsibility for their own actions. Blames others can sometimes be the easy way out. A poor excuse for not doing the basics when purchasing a product or service.
 

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It comes down to people taking a little responsibility for their own actions. Blames others can sometimes be the easy way out. A poor excuse for not doing the basics when purchasing a product or service.
You could say the same thing about fat people. Everyone who is fat exhibits a lack of personal responsibility.
 

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Being obese does not mean that you are blaming the grocer or the fast food restaurant for your obesity.
 
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