10 Reasons You Shouldn't Have A Financial Advisor

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OUTLINE
0:00 - Certifications
1:36 - Second Channel
2:09 - Reason One
3:40 - Reason Two
4:22 - Reason Three
5:16 - Reason Four
6:17 - Reason Five
7:22 - Reason Six
8:47 - Reason Seven-Ten

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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.

[AxeCheeks]

Youtube and the internet is my advisor. I read a lot, try to learn and see how things work.

[astromaxx]

I grew up loathing the so-called financial advisors- all of them just trying to shove down my throat their high fee Mutual funds. Started to educate myself- also thanks to people like you- and been doing much better financially now. So thanks!!!

[mavrick]

My reason for being leery of financial advisors and planners is our experiences in 2008. We were with the Investors Group and didn't have a clue about the stuff we didn't know that we didn't know. That puts the client in a position where they can be taken complete advantage of because they don't even know how they are being used. I would suggest that anyone who is considering hiring someone to look at and advise them on their hard-earned money, that they first commit to some basic investigation on terms, fees, options, etc. Fortunately, we stumbled onto Moneysense magazine (I know it's no longer a magazine but it is online. We haven't used it for awhile so don't know if they have maintained their standard of solid information). I also swallowed my pride and called an uncle who was known in the family as "being smart about money." I decided before I spoke to him that there would be no dumb questions and so I asked him anything and everything I could think of. He was so helpful. I would check in with him every so often as we started the process of transferring all of our money out of the Investors Group (a horror story on its own). We now do all our own planning with the assistance of a fee-based planner out of Edmonton who checks our plans every 4 years or so. We use the DIY feature on TD Direct Investing to buy and sell ETFs and rebalance once/twice a year. At 67 and 73 we also backfill with GICs and have a few stocks we play around with. We have registered and non-registered accounts as well as an emergency fund. We do get very frustrated with the lack of connection between the TD Direct Investing online format and the local TDWaterhouse branches (all of the paperwork you have to do for the online TDW platform has to be shuffled through a local branch and the branch's lack of knowledge about financial terms and processes is shocking). I regularly scan the internet for reliable information from people like you Adam, and watch Money Talk on TV and online to keep track of bigger trends. I agree with you that unprofessional conduct from financial planners and advisors is responsible for the reputations that many of them have, however there are some good ones out there. And it is our job to first know our own goals and plans, spending habits and risk profile before we start looking for the professional planners to help us make the most of our money.

[Expedition]

Unfortunately institutional advisors seem to be no more than glorified salesperson. They have long been pushed into selling whichever products their management tells them. Not too often they get to know you and really listen to your plans, ideas or suggestions and what goal you're trying to achieve. In there defense they somewhat have to tow the line and some can be limited to product availabity.

[jovicrazed]

The "planner" at my bank is a CFP yet there was absolutely no planning to be found for the 2.89 percent I was paying each year. So glad I moved.

[evadeanu]

Great video Adam, and it came a the best time ever. Thanks.

[rosechung]

Spot on. Totally agree with your video.

[richardli]

I have met young financial advisors who have not even seen actual money.

[pwong]

Wow ...second comment here and I am one of the 44% number since 1997 and my cfa designated son helps me while I am melting down my RRIF. Great video as always.

[urbanoutdoorsman]

After working with several advisers and CFPs, I’m convinced that they do not know any more than I do. Having said that, I do hold an MBA so wouldn’t recommend this for everyone

[Dingeraye]

I've been managing my own for 30 years. I beat the average return you describe (by a couple of percent). But, really, that would make it closer to 3 or 4 percent if you factor in not paying an advisor. Recently, I bought an hour of my accountant's time to talk about taxes in general and things to think about as I retire. It was the best return on investment all year. He wasn't telling me what to do, just what he had done for himself and what he might do in my position. I find your videos fascinating. You answer a lot of questions I have wondered about, but haven't had time to sit down and figure out myself. Thanks! After all that, my only advice to others is to never, ever use a bank as a source of financial planning. Banks are like Casinos. You have to ask yourself who paid for the impressive building and all that advertising.

[lomayagi]

Thank you for the honest feedback. It is good to see the explanation of the largest % responses broken down with your detailed feedback on each. From my own personal anecdotal experience, I've had an old high school friend who is a CFP manage money for other friends, and they quickly pulled out because of the poor experience, and he was putting their money into high managed fee funds from his bank. When we looked back at it, everyone would have done significantly better if they just dropped their money into S&P/TSX index funds and called it a day, and saved on paying out the mgmt fees to boot.

[cathyp]

Very true . High turnover rate, little trainning

[dangrather]

I was invited to my bank to see their financial advisor. We discussed my situation and he simply printed a portfolio fund with an MER of 2.8% and said I recommend this. I said ok and left.
I find the banks just push their own expensive funds.

[lw]

I was in the 34% and he never contacted me, even when I reached out to him. I moved low six figures to Questrade and Wealthsimple. I could not stand the fees I was paying for no service. When I added that up over the next 10 years I just could not justify that.

[invest]

is it best to buy vfv and xiu and call it a day or do robo investing in wealthsimple

[glennet]

If you are retired and withdrawing a typical 4% a year then a 1% fee on the capital is 25% of your annual withdrawal - equivalent to an extra 25% income tax.

[wisemintapp]

A skilled financial advisor is an investor's best asset. Problem is - how do you know if they're skilled or not?

[davidblack]

I expect I'm like many who enjoy and learn from your channel, Adam: a DIY investor who draws on the expertise of authors, financial journalists and YouTube sources like yours to educate themselves. It's a hybrid approach--when I have a particular question I need to answer, a recent one being how to manage a relative's new RRIF, I go to those expert sources.

I think the prejudice as to professional advice really begins with that bad old history in financial Canada: some of the highest MERs on mutual funds when those were the main option for the average investor; the late arrival of index funds and ETFs, as well as the obfuscating complexity of financial products in general; the bank-centered nature of our personal finance culture, with its legions of salespeople at branches offering advice and encouraging clients to use the in-house investment products; the fact, as you say, that anyone can identify themselves as an "advisor" or "planner" and the weakness of the fiduciary principle as a result; and behind all that, the scandal of our poorly regulated fiscal environment, lacking as we do a national securities regulator like the U.S. SEC, which gives the personal finance industry a lot of room to self-regulate, and therefore creates disincentives for real reform. John Lawrence Reynolds' 2007 book, The Naked Investor, outlined the major shortcomings in the financial advice industry in Canada long ago, and I expect his book remains accurate in many respects.

One of the great things your channel does is to show who fee-based advisors are, and in view of your excellent content, what they offer. While your channel helps your business in that regard, and that's fine in itself, it also elevates fee-only advice and advisors generally as something that DIY as well as more typical investors can use with confidence.

[OptimisticHominid]

An interesting and very original topic for a video by a Financial Advisor/Planner! I do my own investing and planning, having built a rather complex spreadsheet projection tool. However, despite the many hours I put in on building this thing, I still wonder if I'm missing something. I don't think I am, or am I?