The financial industry is like so many other industries that are changing because of a change in technology.  The internet has given the general public access to the stock exchanges without having to go through a broker or a financial advisor – just set-up your on-line trading account and off you go!

All types of investment accounts including RRSPs, RRIFs, LIRAs, LIFs, and TFSAs can be set-up as online self-directed trading accounts.

The benefits: lower costs, more control

The detriments: loss of advice, responsibility (that’s right, you can’t blame your broker anymore!)

Should you go for it? Absolutely!

I am a huge supporter of fees for advice.  Pay a contract rate to your advisor to produce a plan or an investment review tailored to what you need.  Take the advice and implement it yourself.  Why should you pay trading fees or MERs for mutual funds as well as account administration fees?

Take note, I think that advisors add real value, and it is important to find the right advisor for you, one whose beliefs about money and financial housekeeping are aligned with yours.  When is the last time you asked your banker or financial advisor what their beliefs were around the topic of money, investments and financial planning.  I bet if you asked, most of them would be thrown off balance.

The truth is that most advisors are sales people, and some advisors are true professionals who value their own advice.

I think one of the problems that most investors face is that they don’t quite understand how their financial advisor gets paid, therefore, they have no idea what they are actually paying their guy or gal for doing absolutely nothing!

Thankfully, there is a move in the industry towards disclosure.  Very soon financial advisors will have to disclose exactly how much money they are making on your investments.  Most in the industry aren’t too happy about it, because they know they don’t deserve what they make.

If you’re interested in finding out more about how your investment/financial advisor gets paid, stay tuned for more, coz I’m not done talking about it!

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