59 cent loonie? That’s what I read about this week along with some Tangerine news, the suggestion to sell everything now, and market weakness advice. Hard to believe that’s what some financial experts are calling for our dollar, but it could happen I guess. Personally, I don’t see it going that low. Maybe $0.65 but really, like the price of oil, what my stocks might do or how my portfolio could perform, what the weather will be like next week….I have no idea. On that note, trying to forecast the future, I’ll have some fun and share some thoughts anyhow on what I think might happen in 2016 with an upcoming post about financial predictions – so stay tuned for that.
In case you missed it this week, I told you we’re closing in on another milestone as part of this dividend income update and I shared three investing habits I’m going to try and kick this year.
Enjoy this Weekend Reading edition and see you here again next week.
Tangerine recently launched Secure Chat that allow clients to interact securely and discuss their banking needs over a real-time chat session. This bank is certainly customer-focused and leading the charge with a shift to digital services.
BMO is launching SmartFolio, its own robo-advisor service. If I get some more details from BMO on this, I’ll post an article.
RBS basically said “sell everything” because 2016 will be a “cataclysmic” year. I’m not following this advice.
Steadyhand had a much more sensible take – they reminded us when it comes to market weakness keep your eye on the prize.
Here’s some advice on what to do now that our oil industry, our dollar and equity markets are blowing up.
Andrew Hallam wrote about blowing up your retirement plan into more manageable bits.
MMM interviewed a lawyer who retired at age 33.
Michael James on Money shared his portfolio return.
Big Cajun Man said his wife is looking to “switch things up” with their groceries.
How To Save Money highlighted the fine print you’ll find on many coupons.
Roadmap2Retire shared an annual update for his portfolio, passive income, blog and more.
Here’s Preet’s simple signal to save more money:
Mark
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re: BMO robo fees — “This beats the 2-3% MER mutual fund though, right?”
Perhaps at first blush, but not necessarily true.
Lifted from one of my favourite financial pros who runs a 0.35% fee full-service investment firm (Cullen Roche/Orcam Financial) :
“As the indexing revolution has swept over these firms the high fee closet indexing mutual funds have been increasingly swapped out for the low fee index funds. But the high fees are still there. They’re just lower high fees than the outrageous 2%+ fees that were once there. Unfortunately, what we’re seeing across the business today often involves an advisor who charges the same 1%+ fee that the mutual fund charged, but they’re selling it within the “low fee indexing” pitch. So, what you actually end up owning is a low fee indexing strategy wrapped inside of a high fee asset management service. In other words, you end up with a fee structure no different than the investor who owns the high fee mutual fund in their own discount brokerage account.”
Read that last sentence again.
I did a quick run down of US FinTech and the fees of the most expensive firms still come in under 1%, all-inclusive.
Perhaps it’s Canada’s permenant albatross — economy of scale (and molasses-like growth of competition) — which will always subject us to high prices, no matter the good or service. But technology is supposed to make things cheaper, right?
I’d seriously dissuade any new/know-nothing investor from putting their first $5-$10,000 into BMO’s robo just to be fee-gouged.
Missed a word “Not that it’s all Good”
No need to serf the web, just read Marks post.!
Not that it’s all, but it is interesting.
Thanks Mark
Thanks Cannew!
BMO SmartFolio: they charge an annual 1.2% “advisor” fee in addition to annual 0.2-0.35% ETF fees?! Reminds me of the classic Pixies song, “Gouge Away”. Charles Schwab’s robo-advisor service is FREE (ETF fees apply). Perhaps Canada will never relinquish its high priced financial products and services (yeah, I’m talkin’ to you, mutual funds!).
Internet Groceries: The subways in South Korea have giant touch screens allowing a person to order groceries while they commute, delivered by the time they arrive home. Koreans are crazy tech adaptors so it works for them. I’d probably use it if I bought a lot of canned goods.
RBS: didn’t they collapse in 2008/09? I’d rather not take short-term advice from a failed company.
I think the BMO SmartFolio has a place. My understanding is the “advisor” fee is 0.7% for the first $100,000 then the ETFs fees are on top of that SST.
Sure, room for improvement but much better than 2-3% MER mutual funds, no?
Schwab’s robo-advisor service is FREE (ETF fees apply) – that’s a good model my friend.
“Internet Groceries: The subways in South Korea have giant touch screens allowing a person to order groceries while they commute, delivered by the time they arrive home.”
Wild…I had no idea…
Yes, RBS was close to a nothing-burger after the financial crisis. Who listens to them anyhow? No you 🙂
Thanks for your comments as always.
re: “My understanding is the “advisor” fee is 0.7% for the first $100,000…”
Advisor fee structure, explained by BMO:
“Investors will be able to open an account with C$5,000…Fees will be tied to assets, starting at 0.7% for the first C$100,000, with a minimum quarterly cost of C$15…”
$60 on $5,000 is 1.2%.
Basically screwing the small investor in favour of the large.
It’s automated algorithm allocation into pre-fabricated baskets of their own products, the fee should be the same no matter what the dollar amount.
And don’t think this move by BMO into FinTech is altruistic (as demonstrated by their fee structure). They are advancing into robo land in order to secure their bottom line: “A recent report by McKinsey found that 60% of bank profits are at risk from new FinTech players” (Fool.ca).
Buy their stock, but don’t use their product.
Correct, this is what I understand about their SmartFolio product:
-Investors will be able to open an account with C$5,000.
-Fees will be tied to assets, starting at 0.7% for the first C$100,000. Advisory fees will be lowered after $100,000.
-A minimum quarterly cost is C$15.
-Investors can use SmartFolio for pre-constructed portfolios or their proprietary ETFs (e.g., ZCN).
My take?
1) I’ve learned over the years there’s always room to lower costs for investors but it seems clear to me over the last year big banks and other financial firms (Wealthsimple) are at least listening to customers/customer demand.
2) BMO and other firms are doing this to get ahead of upcoming requirements. Coming this summer, new industry rules require investment firms to provide clients with detailed portfolio performance information.
3) As you say, BMO is looking to increase their bottom-line, and I don’t blame them. They are a big business after all and their goal is to make money for shareholders. I am one of them. 🙂
If I get more details from BMO I might post an article about this stuff, overall, a good move for BMO and at least consumers have alternatives SST. This beats the 2-3% MER mutual fund though, right?
Yeah RBS… just remember their bs in 2008/2009 in the same way of UBS and JPM…
These lemmings are like the other propagandists in the mainstream medias.
But we need these bargain generators so…
LOL. I always enjoy the rhetoric coming from the likes of RBS…makes me laugh. I see this as entertainment, nothing more. 🙂
Haha yeah, especially when the RBS announce was displayed in big and as the first article on the Financial Post, it was some Michael Bay level of silliness 😉
Just noise to sell papers and drive propaganda – I like it. 😉
It’s an interesting grocery experience, we will continue on with our bold experimentation, into the lurid world of on-line grocery shopping. Thanks for the mention too, have a great weekend!
Yes, sounds like it. Enjoy your weekend!
I think nobody knows what will happen to the Canadian dollar, so why worry? Thanks for the mention.
I’m not worried just interested.
Have a great weekend!
Another great set of reads, Mark. Looks like I have some catching up to do on my reading over the weekend.
Thanks for including my post in the list.
cheers
R2R
Have a great weekend!