Weekend Reading – Can anyone be a Financial Advisor?

Weekend Reading – Can anyone be a Financial Advisor?

Hey Everyone,

Welcome to a new Weekend Reading, wondering if anyone can be a financial advisor?

First up, a few recent reads/posts:

I shared a few 2024 predictions here, including what NHL team I believe will win The Stanley Cup!

I posted this final dividend income update for 2023, and I hope to share our January 2024 monthly dividend income update next week!

Weekend Reading – Can anyone be a Financial Advisor?

Well, probably not anyone but the term can be confusing and recent announcements don’t help. 

That’s why this Morningstar article caught my eye, since just recently:

“…the Financial Services Regulatory Authority of Ontario (FSRA) has stepped into the fray. The FSRA approved the Canadian Investment Regulatory Organization (CIRO) as a credentialing body, meaning CIRO members can call themselves financial advisers.”

Essentially, any of the following can use the term/title as a:

  • Registered Representative;
  • Mutual Fund Dealing Representative;
  • Portfolio Manager; and,
  • Associate Portfolio Manager.

This is probably not helpful to many Canadians trying to navigate the alphabet soup across the industry. 

This is a good reminder to me why I became My Own Advisor. I figured decades ago nobody cared more about my money and my financial well-being than I do. Via this site, and engagement with you, I hope you feel the same or empowered to take on most personal finance subjects on your own. 

From the article, I enjoyed the punchline:

“The person who cares most (or should care most) about your money is you. So you need to choose your financial advisor wisely, and with thorough due diligence.”

More Weekend Reading…

From other articles I found interesting this week:

Although this was published last year, I thought it was a nice set of reminders why investing tends to be different than everything else – related to my theme this week.

The seven points from this article:

1. Short-term feedback means little – indeed, it’s mostly noise. 

2. There’s no app for that – again, take the long, multi-year or multi-decade view if you can.

3. The best action is no action – avoid tinkering with your portfolio and/or using money managers do that too with too many funds or products on your behalf. 

“Wall Street makes its money on activity. You make your money on inactivity.” – Warren Buffett

4. If everyone is doing it, don’t – while investor sentiment is interesting, that’s about where it ends.

5. More features, less return – more toys, more problems. I believe using covered call ETFs fall into this category. Recall Covered Call (CC) writing involves buying shares of a company and selling options on those shares. Proponents of a CC strategy claim that the premium revenue cushions stock price declines while adding to overall returns. There is just one problem with this thinking: financial markets do not give out free money.

I wrote about this before:

Weekend Reading – Covered Calls Edition

If you are receiving a benefit/premium from an ETF or financial product using a particular covered call or leveraged strategy then there is always tradeoff. If it’s not obvious to you keep looking and asking more questions. 

6. Forest versus the trees – a reminder that all financial decisions are made on incomplete information, at a point in time, including any stock selections. 

7. No price tags – the investment industry, particularly wealth managers, have to put food on the table as well. Make sure you understand the costs of your financial decisions with them. Even paying 0.5% for assets under management could cost you hundreds of thousands of dollars in fees.

From Rob Carrick recently in The Globe and Mail, when answering some questions about investment protection coverage:

“Q: I have four different investment accounts with my online brokerage – RRSP, LIRA, TFSA and non registered. Am I covered for $1-million for each account, in the eventuality of brokerage fraud, bankruptcy, etc.? Or, am I covered for a maximum of $1-million for the grand total?”

A: Check out the coverage of brokerage accounts works at companies that are members of the Canada Investor Protection Fund.

I offered some quick thoughts on ‘Loud Budgeting’ recently in this post below and I was recently inspired to tackle this subject – I hope to write about in the coming weeks. 

Weekend Reading – Is technology and oil the New Barbell Strategy?

Given this ‘Loud Budgeting’ trend seems fueled by a younger generation essentially saying to others “I can’t afford it” (what GenX said…) I was interested to read about the components of household debt recently – quite the visual:

Scary stuff…

My partners and supporters of this site over at 5i Research compared Enbridge (ENB) and TC Energy (TRP) stocks for your portfolio. Which one should you own?

My friend Dividend Growth Investor shared the U.S. Dividend Aristocrats for 2024. 

To qualify for membership in this index, a stock must satisfy the following criteria:

1. Be a member of the S&P 500
2. Have increased dividends every year for at least 25 consecutive years
3. Meet some minimum float-adjusted market capitalization and liquidity requirements.

The group of companies in the Dividend Aristocrats Index tends to generate reliable dividend income, and provide the potential for strong total returns. This list is well diversified across many industry sectors.

While a great list, I’ve gravitated to owning more low-cost ETFs to capture returns beyond Canada in recent years, and I will continue to do so. I do continue to own a handful of U.S. stocks but that’s it – names like BlackRock, Waste Management, and Walmart are near the top of our U.S. holdings. 

As a follow-up to my/our celebrations on being mortgage free and debt free, I have received more emails in my inbox about the pursuit of happiness. While I do remain very happy about this accomplishment, now weeks later, I was reminded by a few readers that while financial accomplishments are great, there are many more keys to happniess. 

I do know this of course…but I appreciate the reminders too!

That’s a good time to remind you (and me!) that it’s all about your personal Balance at the end of the day. Something author Andrew Hallam wrote about and something I’m trying to practice more of too. 

It’s all about Balance with Andrew Hallam

Andrew’s book and countless other publications continue to demonstrate that healthy relationships, a healthy lifestyle and almost least important, “enough money” to make you comfortable (whatever that is for you) are the key ingredients to any personal balance and ultimately finding your happiness in life.

You can also check out Ben Carlson’s post about The Happiness Paradox. 

Have a great weekend and I’ll be back next week! Comment or email whenever. I read everything and try to reply to everyone. 🙂

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

10 Responses to "Weekend Reading – Can anyone be a Financial Advisor?"

  1. Hi Mark: Here is a stock that might be right down your alley. It’s high priced but unlike stocks like ATD and WCN it also has a high yield. The stock is OLY-T. I have been following it for years but have yet to pull the trigger. When I first saw it the stock was on the Venture Exchange in Vancouver and was a $40.00 stock that paid $2.40 and now it has moved to the TSX and is now priced at $112.00 and pay’s $7.20. They deal in pensions and medical benefits. It has as far as I can see only two things that are wrong with it. It has low volatility and low volume. It is a pretty quiet stock and is out of the limelight. If you like a high priced stock you can’t beat that dividend. At that rate it yields 6.43%. Just thought you might be interested.

    Reply
    1. Thanks, Ronald. I’m trying to focus a bit on lower-yielding, higher growth stocks (like WCN) in recent years along with more boring XAW for my TFSA but will take a look to see if that fits my thesis! 🙂
      Mark

      Reply
  2. They did an acquisition a few years back that took longer to integrate etc, Mr Market punished them. CEO fell on his sword over that, with a monthly div to pay , new CEO should be very disciplined re future growth

    Reply
  3. Hi Mark: Who can be a Financial Advisor? Anyone. All you have to do is write the Canadian Securities Test, know all the in’s and out’s of financial instruments and have lots of insurance and get yourself registered. That’s all. The test if studied should be a snap but being on your toes with all the financial instruments may be trying and why insurance. Well you don’t want to be sued do you as that would be no fun at all and to get insurance may be expensive. I personally would not want to be one but if someone didn’t know about the stock market I would give them my advice free of charge. After all I’ve learned a bit over 50 years. Mark I’m sticking to stocks, trusts and partnerships because I understand them. I bought bonds once and found them to be not tax efficient. Covered calls I don’t truly understand but I do have an ETF (ZWB) and options also I don’t understand and I was taught to stick to your own knitting. Doing so has helped me get ahead and as I say Get Rich Slow. Stay safe, have fun and keep investing.

    Reply
    1. “Who can be a Financial Advisor? Anyone.”

      Yes, of course, a bit tonque in cheek. The point is there is a soupy mix of criteria where it applies to which I’m not sure is helpful that Canadians are / are not getting advised well.

      “Mark I’m sticking to stocks, trusts and partnerships because I understand them. I bought bonds once and found them to be not tax efficient.”

      Hey, if that works for you, go for it. You seem to have done very well financially by sticking to your own plan/cooking. 🙂
      Mark

      Reply
      1. The regulators are enforcing some educational requirements on using the title, which is very much a step in the right direction for consumers. Previously anyone could, and did, call themselves financial advisors. Life insurance agent selling seggregated funds? Financial advisor. Which is a big oof.

        The other possible benefit, is that it makes it clear who is NOT a financial advisor – like the folks that run this blog, and many other bloggers. I’m sure it’s always a sensitive subject when you’re writing on financial matters, to be very clear to readers that you’re not providing actionable advice. Maybe saying ‘I’m not a financial advisor’ will make it clearer.

        Reply
        1. It’s very clear I’m My Own Advisor 🙂 – literally in the title and says nothing about finance.

          I get what you mean though, Glenn.

          Cheers!
          Mark

          Reply
  4. CHE-un.to just raised div 10%, sadly share price went up also and they are phasing out DRIP. Still a 7-1/4% div with higher div

    Nice moat around their biz

    Reply

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