MORE TRANSPARENCY ON INVESTMENT ADVICE IS A GOOD THING

Mar 01, 2019 | Brent DeKoning, Associate Advisor, Lorkovic Wealth Management


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There are 3 factors that will make up how much money is left in your pocket when purchasing an investment. One the amount of risk you are willing to take on, two how much you pay in taxes, and three how much you are paying for investment advice.

There are 3 factors that will make up how much money is left in your pocket when purchasing an investment. One the amount of risk you are willing to take on, two how much you pay in taxes, and three how much you are paying for investment advice. The more you are paying in management fees for investment advice equals the less that is available for you.

You may have heard about it in the news – the Client Relationship Model II, or simply “CRM2.” CRM2 is a new set of industry regulations meant to provide investors with more details on their investment costs and performance. It was developed by the Canadian Securities Administrators, an organization representing Canada’s investment industry regulators. All investment firms will be providing these additional details on your existing statements and in two new reports that will be delivered to you.

This is great news as any time you are paying for a service, transparency and cost breakdown is an excellent thing. There is no better time for Investment managers to show their value to their clients. Be cautious about going with the lowest cost option available approach. Sometime things are cheaper for a reason. I learned that the hard way with finding the cheapest mechanic once. Warren Buffet the greatest investor of all time, once said "Price is what you pay, Value is what you get”. As an investor ask your Investment Advisor how the firm is compensated for their services and what is the total portfolio cost and what is all included in those services.