Just as there are a lot of mutual fund and exchange traded fund (ETF) options, there are many places you can take your money to be invested. I would break it down into three separate offerings: “full service”, which is developing a relationship with an Investment Advisor or Portfolio Manager at a brokerage firm, many of which are operated by large Canadian financial institutions (such as RBC Dominion Securities). “Medium service”, which is working with an advisor in a local bank branch, credit union or trust company and “limited service”, which means opening an online self-directed or "robo account”, which consists of platforms from the major Canadian banks as well as independent offerings.
Full service advisors are investment specialists who offer investment options and wealth management services such as estate, tax, retirement and insurance planning. They are licensed to offer all financial products such as individual bonds and stocks. It is very common for investment advisors to charge a percentage fee to manage your assets similar to the MER of a mutual fund. Advisors working in a retail bank branch setting are licensed by a different regulatory body and generally have access to mutual fund, ETF and GIC based investment solutions. Bank advisors offer lending and other bank products such as credit cards and banking accounts but cannot offer insurance products as it is restricted by the Bank Act. Online or ‘do it yourself’ investing sites such as RBC Direct Investing are intended for investors who know what they want to buy and do not need advice. Similarly, the new ‘robo-advisor’ sites such as RBC InvestEase help with investment planning and selection but do not have a dedicated Investment Advisor attached to the portfolio.
All of these can be great options depending on your individual needs. So that’s the key question - what do you need? If you want a dedicated advisor and planning, then your options are full or medium service. Many full service Investment Advisors have a minimum portfolio size that they will accept for new clients so it is important to inquire upfront. That may seem pretentious, but in order to continue to provide a high level of service they have a maximum number of portfolio’s they can manage. They hope to work with each client through many different life stages and develop a solid long term relationship. If your situation is more complex, you need advice and you have an appropriately sized portfolio, you may be best suited for full service to utilize the broad spectrum of investment options and wealth management services. Of course, if you don’t need or want advice and want to do it yourself, then an online brokerage can often be a great fit. Advice and responsibility comes with the fee that I charge and that is part of the value that I offer along with our full suite of wealth management services.