My Own Advisor

A few weeks ago on a flight, I read an article in The Globe and Mail entitled Four experts offer their RRSP game plans.   The premise of the article was to disclose the RRSPs of four certified financial planners; strategies that Canadian investors might consider for their own portfolios.  To be honest, I was a little surprised by the personal strategies of some of these financial planners.  Maybe that’s why personal finance is personal.

In any event let’s review what they told us (in quotes from the article) with my questions and comments for these planners that follow (in italics).  Maybe you have some questions for them as well?

Profile # 1 – Mark Coutts, President, Coutts Financial Services Inc.

is “…almost exclusively mutual-fund based in this portfolio….”

Mark Coutts, why mostly mutual funds in your portfolio?  In the article you highlighted the CI Signature High Income Fund (with a management expense ratio of 1.60%).  I don’t dispute this has been a star performer since inception (9.83% return) but out of the thousands of mutual funds Canadian investors have available to them, who could have selected this one and foreseen that success?

Profile # 2 – Teresa Black Hughes, Financial Advisor, Rogers Group Financial

“Working with a financial adviser, she has added some U.S. stocks that now account for about 20 per cent of the equity portion, with 20 per cent from Canada (including some exchange-traded fund), 10 per cent in emerging markets (especially in Asia) and 10 per cent in gold and precious metals mutual funds.”

Teresa, why work with another financial advisor?  Maybe for unbiased help?  Also, I wonder if you’d advise most Canadians to hold 10% in precious metals?

Profile # 3 – Dean Owen, Partner, Cherry Financial Services Inc.

“70 per cent equities (mostly segregated funds and some mutual funds); 5 to 10 per cent fixed income and the balance in real estate funds.”

Dean, why hold segregated funds at all?  These are high-prices products.

Profile # 4 – Susan St. Amand, President and founder, Sirius Financial Services

“She holds no equity mutual funds, preferring to work with her adviser in selecting a diverse mix of stocks, including dividend-producing banks stocks, to achieve her goal of an annual return of 6 per cent, including inflation.”

Susan, like my question to Teresa, why work with another financial advisor?  For unbiased help?  Also, why keep your dividend-paying bank stocks in your RRSP?  (You are investing in a tax-advantaged securities in a tax-deferred account).

I wouldn’t necessarily follow some of these strategies above which is why personal finance should be tailored to the individual; as defined by their financial plan.  Maybe that’s the hidden message here from the experts all along.

I’m sure some experts would not agree with my portfolio, holding broad-market Exchange Traded Funds (ETFs) and mainly U.S. stocks in my RRSP.  Or would they?

Do you have any thoughts on the RRSP strategies of these experts?  What do you agree with or disagree with?  I look forward to your comments including any comments from the CFPs to share more details about their strategies with me.

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