Recommended fee-only financial planner in or near Toronto?

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Trident Mountain
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Recommended fee-only financial planner in or near Toronto?

Post by Trident Mountain »

Hello everyone.

I live in Toronto and am looking for a fee-only financial planner. I have a couple hundred thousand dollars in cash in various places that I would like to invest long term in low-cost index ETFs principally for retirement (maybe 30 years from now). I probably don't meet the advertised minimum threshold for a fee-only planner at this point, but I fully expect my stock of investable assets to grow rapidly as I have a high income but low expenses.

I would like to work with someone whose first impulse is to use low-cost index approaches, and would be knowledgeable about, say, US small cap value index funds or real estate index funds... but who wouldn't recommend a commodity or an active "index fund" just because it's new.


Does anyone have any recommended leads?


I had thought about the DIY route, but I'm already at the point of maxing out my TFSA and RRSP room. I was thinking of now investing within the confines of my professional corporation... but I'm starting to get out of my circle of competence given the potential legal and accounting ramifications of this.

What complicates this further is that my wife is in essentially the same position. We could put off getting professional advice for a little while... but it's better to deal with this sooner rather than later.


I originally posted this on the bogleheads forum at the following link:


http://www.bogleheads.org/forum/viewtop ... 1&t=100281


TM
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Re: Recommended fee-only financial planner in or near Toront

Post by DavidR »

Trident Mountain wrote:Hello everyone.
I live in Toronto and am looking for a fee-only financial planner. I have a couple hundred thousand dollars in cash in various places that I would like to invest long term in low-cost index ETFs principally for retirement (maybe 30 years from now). I probably don't meet the advertised minimum threshold for a fee-only planner at this point, but I fully expect my stock of investable assets to grow rapidly as I have a high income but low expenses
TM
Do you mean fee-only or fee based?
from our finiki http://www.finiki.org/wiki/Finding_a_Financial_Adviser
There are some advisers who are fee-only; you pay for a plan which, depending on its complexity, could cost between $1,000 and $10,000.
Other advisers are fee-based. That means they charge an annual fee based on assets. Generally, the more the assets the lower the annual fee.
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Re: Recommended fee-only financial planner in or near Toront

Post by Trident Mountain »

> Do you mean fee-only or fee based?

Let me first tell you what I don't want: someone who gets a commission for churn on my account. I want my advisor to act as a fiduciary for my account, and I want his incentives lined up in such a way that he is financially encouraged to grow my account (as opposed to having me merely invest more money or make more transactions).

Therefore, what I don't want is the typical situation where I go to Bank X and their advisor gets a commission for every one of the bank's products he sells to me.

As two people who are on this forum, I'm sure I am preaching to the choir.

If we went with a purely fee-based approach then the advisor only (might) have incentive to have me invest more money. If we have a pure fee-only approach, he is not incentivized (necessarily) to grow my account. Some sort of hybrid between the two would probably be best, though as always, it depends. All of these options, of course, are superior to the commission-based seller.

Of course cost is also a factor... and in the end, if I pay 10K for option A and 5K for option B and both are giving me the same impartial advice, I would go with option B. Cost, of course, is what attracts me to ETFs to begin with, since that's the one thing that you can actually control from the outset that directly affects return.

So, in summary, I want to avoid the conflicts of interest inherent in the situation that is all-too-common in the Canadian situation of non-fiduciary broker, but I don't want the costs to be exorbitant.
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Re: Recommended fee-only financial planner in or near Toront

Post by DanH »

Any advisor that is licensed as a "sales person" is not automatically held to a fiduciary standard by the law (but may be depending on the circumstances). Only discretionary portfolio managers are held to this standard automatically. I'll leave it at that unless you have more specific questions but there are two lists that are worth reviewing.

1. I complied this list a few years ago in response to requests like yours but as time goes on it's not as current as it was.

2. The Canadian Couch Potato blog maintains a list of fee-only advisors in Canada.

Neither is comprehensive. There are good advisors at (almost) every firm and many good fee-only advisors are surely missed by the above two lists. But it's a starting point.

You might also find this blog post helpful when examining ways to pay for advice.
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Re: Recommended fee-only financial planner in or near Toront

Post by DanH »

Trident Mountain wrote:If we went with a purely fee-based approach then the advisor only (might) have incentive to have me invest more money. If we have a pure fee-only approach, he is not incentivized (necessarily) to grow my account. Some sort of hybrid between the two would probably be best, though as always, it depends. All of these options, of course, are superior to the commission-based seller.
TM, there is not standardization of labels so here is how I categorize the compensation models.

1. Commission = commission (transaction & asset based %)
2. Fee-based = % of asset fee but embedded in MER because it's paid by product provider (so technically a form of commission)
3. Fee-only = % of asset fee (like fee-based) but paid only by clients (no third party payments)
4. Fee-for-service = flat dollar or hourly fee for time spent doing financial planning; a subset of fee-only because this fee is paid only by clients (not third parties)

Your "fee-only" sounds equivalent to my "fee-for-service". And I can tell you that this doesn't exist as far as I know in this country. And I've heard of only one example in the U.S. (though there must be more than one over there). I offered the only service of this type for 6 years and while it was a profitable offering new regulations (and costs thereof) and a renewed vigilence of regulatory enforcement staff effectively raised the cost of doing business to the point where it's almost impossible to offer a fee-for-service investment advice model.

When I did this kind of work (2004-10) I tried to find others elsewhere in Canada to refer people to that called me from outside of Ontario. Despite my best effort, I couldn't find one firm that was licensed to give investment advice based on individual circumstances and charged for this advice via an hourly or flat $ fee. It didn't exit then so it's unlikely to exist today (though I haven't looked very hard in recent years).

All to say that your choices are 1, 2, or 3 from above. The only exception is to find one of the handful of people who operate on a fee-for-service who are willing to dance on the line between what we call registrable activities (i.e. services that require a license) and non-registrable activities (activities/services that resemble registrable activities but technically don't fall into that bucket).

And you may find a couple of those firms in the lists I provided earlier.

Good luck!
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Re: Recommended fee-only financial planner in or near Toronto?

Post by DanH »

This seems as appropriate as any other thread in which to post this. Noted Financial Planner and financial blogger/podcaster Michael Kitces launched a fee-only financial planning network - XY Planning Network - a few years ago. Read about it in this recent online article.

The reason I'm posting this is because he appears to be looking for CFPs to launch a Canadian network. I haven't dug much into this but the business model appears to be true fee-only; advice only; CFP licensee. Now when I look at the list of planners I see many familiar names. Some of them have built up their own brands, reputation, following. I'm not sure what the value is of belonging to a network since if I wanted to I could reach out to, for example, Cynthia Kett because she's easy to find and I know who she is because of her experience and reputation. So not sure if this is for networking or to simply promote the idea of qualified unbiased advice. I suppose part of the value is XY's professional requirements and knowing that everyone in the network meets a certain standard; a set of minimum criteria.

But for what it's worth, this network may grow in the years to come. In the U.S. (see linked article) this network is much bigger after four years than the much older Garrett Planning Network. Thought this might be of interest.
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Re: Recommended fee-only financial planner in or near Toronto?

Post by Quebec »

DanH wrote: 02 Feb 2018 20:50 I'm not sure what the value is of belonging to a network ...
Well, when I saw your post, I immediately had a look to see if they had members in my province. (I'm always looking to find a better solution for the "what to do if I die" plan, and VBAL plus a fee-only planner might do it).

So if the network is featured in the media, potential clients will look at the website and see if there is a planner in their area.

(unfortunately there are none in my province so far)
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Re: Recommended fee-only financial planner in or near Toronto?

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I used one of the planners on that list IMHO she/he was no help and seemed to be really a part timer. The more lists your on the more potential to attract clients. To be able to tell if I'm getting even close to competent advise I'd have to know as much as you DanH or at least know enough to tell your giving good advise and that's a stretch. Client referrals are useless IMO a glowing report from someone can't tell me the competence of the planner, fiduciary adds nothing.
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Re: Recommended fee-only financial planner in or near Toronto?

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BRIAN5000 wrote: 05 Feb 2018 02:13 I used one of the planners on that list IMHO she/he was no help and seemed to be really a part timer. The more lists your on the more potential to attract clients. To be able to tell if I'm getting even close to competent advise I'd have to know as much as you DanH or at least know enough to tell your giving good advise and that's a stretch. Client referrals are useless IMO a glowing report from someone can't tell me the competence of the planner, fiduciary adds nothing.
I believe that all planners have to take the same courses to get their designaion. CFP, CFA or whatever, so you are likely to get the same advice.
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Re: Recommended fee-only financial planner in or near Toronto?

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That is nonsensical. Is similar to saying all accountants, etc. are essentially the same. Education is just an enabler to independent thinking on use of tools and processes. Note the saying that no two economists will agree!
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Re: Recommended fee-only financial planner in or near Toronto?

Post by DanH »

BRIAN5000 wrote: 05 Feb 2018 02:13 I used one of the planners on that list IMHO she/he was no help and seemed to be really a part timer. The more lists your on the more potential to attract clients. To be able to tell if I'm getting even close to competent advise I'd have to know as much as you DanH or at least know enough to tell your giving good advise and that's a stretch. Client referrals are useless IMO a glowing report from someone can't tell me the competence of the planner, fiduciary adds nothing.
I agree that simply signing a form for XY Planning that you will act as a fiduciary doesn't mean much. But I think being held to a legal fiduciary standard raises the stakes for those fiduciaries - i.e. planner is held to higher legal standard. The only providers of financial/investment advice held to this standard are those registered as Portfolio Managers. But if the Ontario government's expert committee on financial planning gets its way all providers of financial advice (regardless of the existence or type of license) will be held to a statutory best interest standard. (As an aside, while a couple of consultation papers have spoken of best interest and fiduciary as different standards, no policy maker has clarified how they differ.)

But it seems to me, Brian, that you do know enough to assess the quality/value of the advice you obtained. Interesting, however, that she gave you the impression of a part-timer. I'm curious; was the nature of her other work related or not at all?
deaddog wrote: 05 Feb 2018 14:03 I believe that all planners have to take the same courses to get their designaion. CFP, CFA or whatever, so you are likely to get the same advice.
I understand that many in the industry can "all sound the same" but sometimes that's because they are all giving you the right advice (e.g., you have a cold; you should rest and up your fluid intake). As someone who has formal education in this field, it's what you do with your education/training that defines the nature and quality of your advice. I never fit in with big banks because I always wanted to do things my own way. Some of the most interesting work I did in my early years involved business valuation and taxation; which I could never have done at any large institution.

So I agree that people at big banks (in the branch) will all sound the same. Once you get to the brokerage subsidiaries, boutique firms and smaller independents you are more likely to see more diversity in advice. Some bits of advice will definitely sound the same. Some of that will be for good reason.
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Re: Recommended fee-only financial planner in or near Toronto?

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AltaRed wrote: 05 Feb 2018 14:09 That is nonsensical. Is similar to saying all accountants, etc. are essentially the same. Education is just an enabler to independent thinking on use of tools and processes. Note the saying that no two economists will agree!
I'm saying that because they have the same education you are liable to get the same advice. If there is a huge discrepancey, then the disignations don't mean anything when it comes to choosing a planner.
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Re: Recommended fee-only financial planner in or near Toronto?

Post by AltaRed »

There is a lot of room between wide discrepancy and 'the same'. Dan has articulated that well. Engineers and architects come up with different solutions as well in terms of, for example, bridge design and skyscraper design, notwithstanding certain fundamentals.
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Re: Recommended fee-only financial planner in or near Toronto?

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DanH wrote: 05 Feb 2018 14:22
I understand that many in the industry can "all sound the same" but sometimes that's because they are all giving you the right advice (e.g., you have a cold; you should rest and up your fluid intake). As someone who has formal education in this field, it's what you do with your education/training that defines the nature and quality of your advice. I never fit in with big banks because I always wanted to do things my own way. Some of the most interesting work I did in my early years involved business valuation and taxation; which I could never have done at any large institution.

So I agree that people at big banks (in the branch) will all sound the same. Once you get to the brokerage subsidiaries, boutique firms and smaller independents you are more likely to see more diversity in advice. Some bits of advice will definitely sound the same. Some of that will be for good reason.
So it is a crap shoot for the novice investor when choosing a Financial Planned/Advisor. The designations mean that one has completed a course and little else.

Aside from word of mouth how does one chose a competent planner from the huge number of choices one is available?
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Re: Recommended fee-only financial planner in or near Toronto?

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deaddog wrote: 05 Feb 2018 15:00 Aside from word of mouth how does one chose a competent planner from the huge number of choices one is available?
I can only speak to my experience. Some years ago, I also used one of the fee for service planners on the list. She was fantastic.

I had hummed and hawed for quite some time about it and looked at the profiles of many "advisors" This was before fee for service was much of a thing and there weren't a lot around. I also looked at some of the big firms where the more prolific authors and columnists work. I certainly had the funds to be of interest to them but didn't like their corporate approach to planning. I am sure it is fantastic but it wasn't for me.

I got lucky in that the planner I used, much like Mr. Hallett, also wrote a lot about personal finance and investing and that allowed me to see her approach and viewpoint. It gelled with mine. She was also a small company and hands-on. As a small business owner, that matters to me.

Now that may be a bad thing, confirmation bias and all, but for me it worked out. You usually do an "induction" session and questionnaire and discussing the results with the planner can also let you see if you are on the same page.
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Re: Recommended fee-only financial planner in or near Toronto?

Post by DanH »

deaddog wrote: 05 Feb 2018 15:00 So it is a crap shoot for the novice investor when choosing a Financial Planned/Advisor. The designations mean that one has completed a course and little else.

Aside from word of mouth how does one chose a competent planner from the huge number of choices one is available?
Crapshoot is overstating it I think but yes there is a range of quality. But I don't see this any differently than any professional. The purpose of the credentials is to ensure some minimum level of education from a uniform knowledge base. But if you don't use it; you lose it. And if you're not inclined to bend over backwards for clients then you won't. If you're not a very curious person you won't do a lot of reading or do your own research.

I have seen medical specialists who didn't strike me as diligent enough. Through word of mouth I sought another with the same medical education; but who was at a cutting edge institution involved in research and seeing patients.

If I compare the lawyer that we used to draft our first wills & POAs to the one we used more recently for an update; they are like night and day.

I can recall a run-in with an accountant early days who was very complacent. And I now know so many fantastic tax accountants who are knowledgeable and diligent.

Name one area of expertise from mechanics to lawyers and doctors or anything where the level of competence and quality is not wide.
Koogie wrote: 05 Feb 2018 17:13
I got lucky in that the planner I used, much like Mr. Hallett, also wrote a lot about personal finance and investing and that allowed me to see her approach and viewpoint. It gelled with mine. She was also a small company and hands-on. As a small business owner, that matters to me.
Good to hear that you had a good experience. I still think word of mouth - from the right person - is the best way to find a good advisor. I have referred many people successfully but I have a good handle on who (I think) is good.
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Re: Recommended fee-only financial planner in or near Toronto?

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DanH wrote: 05 Feb 2018 18:26
Crapshoot is overstating it I think but yes there is a range of quality. But I don't see this any differently than any professional.
Name one area of expertise from mechanics to lawyers and doctors or anything where the level of competence and quality is not wide.
Like I said a crap shoot. :)

The letters behind your name confirm you have some education, not that you are competent.

Cream rises to the top but how does the average person pick the cream of the crop? I suspect the same way they choose a mechanic or lawyer. Although people seem to be a little more secretive of their finances than of other areas of their lives.

I have talked to several friends about who manages their money (I'm actively looking for someone) and they are all happy with the results their financial advisors are achieving. When I inquire about returns I rarely get a number and usually get "It's good enough for us" or "I'm comfortable with our relationship".

It seems that while people are willing to admit they chose a poor lawyer or mechanic, they are reluctant to discuss the performance of financial advisors. it's almost like asking their net-worth.

My experience with finding a financial advisor has been frustrating to say the least. Mutual fund salesmen or portfolios guided by a full service brokers analysts. Both Buy and Hope. If you ask about risk control then they want to sell you a bond portfolio. Think I finally found one but more of a portfolio manager than a financial planner though at my stage of life the plan is to live as long as I can. :)
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Re: Recommended fee-only financial planner in or near Toronto?

Post by DanH »

It's a crap shoot for novices only. For those who have experience investing and/or in dealing with professionals of various types, it gets easier to tell the good from the not-so-good to the bad. I've experienced this over the last 15 years; during which I've become much better and more successful in selecting various service providers. But for novices, it's a crap shoot.
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Re: Recommended fee-only financial planner in or near Toronto?

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Koogie wrote: 05 Feb 2018 17:13
deaddog wrote: 05 Feb 2018 15:00 Aside from word of mouth how does one chose a competent planner from the huge number of choices one is available?
I can only speak to my experience. Some years ago, I also used one of the fee for service planners on the list. She was fantastic.

I had hummed and hawed for quite some time about it and looked at the profiles of many "advisors" This was before fee for service was much of a thing and there weren't a lot around. I also looked at some of the big firms where the more prolific authors and columnists work. I certainly had the funds to be of interest to them but didn't like their corporate approach to planning. I am sure it is fantastic but it wasn't for me.

I got lucky in that the planner I used, much like Mr. Hallett, also wrote a lot about personal finance and investing and that allowed me to see her approach and viewpoint. It gelled with mine. She was also a small company and hands-on. As a small business owner, that matters to me.

Now that may be a bad thing, confirmation bias and all, but for me it worked out. You usually do an "induction" session and questionnaire and discussing the results with the planner can also let you see if you are on the same page.
I had a similar experience. The big bank broker VP / self-serving lying sales rep was not doing much for me on the planning side. I ran some spreadsheets for myself (pretty good with Excel and TVM calculations) but I still had a nagging "what if I am not calculating this right" feeling, especially regarding taxation and how to spend down a retirement portfolio in a tax effective manner.

I surfed around the internet on what should be in a financial plan. I asked friends (most were clueless). I searched the internet on how to select a financial planner. I wrote my own two page list of questions to ask when selecting a planner. I short-listed three and interviewed them, two in person and one on the phone. I selected the one that I had the best rapport with and seemed to understand my needs and situation best.

I had a full plan done, then a couple of years later a "can I retire now?" update done. Total of those sessions was maybe 1/4% of my net worth. IMO definitely worth it in terms of confidence and tax optimization. With what I know now maybe I don't need it, but with what I knew then it was very useful. I don't use that planner any more. If I need financial advice I just talk to myself... much easer to schedule. But I do stay in touch with that planner and team, and would recommend her highly to anyone that asked about real financial planning (not the free plan from the bank).

Here is the list I created on dropbox in case anyone is looking for a planner or interested in how to select one.
https://www.dropbox.com/s/cshvon4140adw ... r.pdf?dl=0
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