A few years ago, my sister Mary discovered how much of her retirement savings she had lost to mutual fund fees. That spark led me to write Beat the Bank. I asked readers about their “wake-up calls”. Here are a few of their responses:
“My wake-up call was the first time I discovered compound interest.” KK
“After reading your book, I closely looked at my investments and now I share your sister feelings.” PT
“The wake-up call is that long term, lower-risk investments are far more likely to generate “Healthy Market” returns IF management fees are minimized. Wish I knew this 10 years ago.” DW
“My wake up call came after reading your book and not realizing how fees affected my returns in the long run. I am currently have a dividend paying mutual fund with a MER of 1.73% and after applying the T-REX calculation it produced a score of 57%. I can relate to your sister’s story on so many levels and decided to quickly change my investment strategy, I have an appointment with my Bank and will be cashing in my mutual fund for ETFs with low MER’s. Here’s the ironic part, I actually work for a financial institution and realize now that it’s time to take control of my investments, it’s time to Wake Up!” ME
“I purchased your book 2 months ago and I could not believe how I was again taken in by unscrupulous agents at my bank. I was charged an average of 2% for a return of 4% for the past three years and nothing in the last three months.” GB
“A revelation for me was the immense impact of taxation on returns and the lack luster returns of bonds in a taxable account.” SF
“I will be managing my personal RRSP plan after seeing how much my financial adviser is charging for very limited services and low account performance.” HB
I remember hearing about a financially educated son who was called upon to settle his mother’s estate. She had been a single mom who worked her entire life at fairly low levels in a Bank, but had followed the simple advice of her first manager to buy the Bank’s stock. She had never spoken to her son about this, and when he opened the files he found she held $1.4M in CM stock. When I heard that story I paired it up with my then recent experience of losing money in CIBC Mutual Funds that had been aggressively sold to me by the branch product peddler. Now there’s a wake-up call. Note to self on rolling out of bed: ‘Don’t buy the Bank’s products — buy the Bank!’ RG
Your book revealed and has reaffirmed that no one looks after my money like I do and instead of owning the bank product, I want to own the bank. I have taken a new interest in investing and now enjoy checking to see who has paid me a dividend or increased their dividend and planning ahead knowing that I won’t have my investment returns eaten up by high fees anymore. JR
Dear Larry,
I am delighted to say I received a signed copy of your book for Christmas from my sister Kim.
It reinforced everything I believe. Everything!
My broker, BMO InvestorLine, recently sent account holders a message announcing their 30th anniversary including the duration that each client had been on file. In my case, they reported I had been with them for 29 years, 7 months.
The desire to dramatically reduce the frictional drag of fees was my primary motivation and remains an essential consideration.
I was among the early adopters of XIU.
The challenge, in my view, is to sustain an attractive risk-adjusted rate of return. Simple right? But not easy. How appropriate is was for you to include the robo advisor option as this paradigm addresses the behavioural finance blunders which represent perhaps the investor’s greatest weakness as we tend to be very poor fiduciaries of our own financial assets.
The concept of expected return is one that you chose not to address directly in the book, understandably. Perhaps it is a subject you might consider including in a future edition of the newsletter especially since the expected return of equities is rising at this juncture.
Wishing you and Alyson all the best in the New Year.
Kind regards,
Mark Kielty CIM
Thanks very much for your feedback Mark!! Obviously you had a lot figured out 30 years ago. Imagine the difference if you had just bought the usual 2%+ fee mutual funds instead.
Such a shame that millions of Canadians just do what the banks tell them. Once again, thanks for your comments…………..please recommend the book to others. All the best for 2019!!
Larry
Purchased this book after seeing it recommended in the Globe and Mail. I was hesitant to purchased as I have purchased numerous books on finance and have been disappointed most times. This book got me very excited as I read it. I do consider myself just above average in knowledge and while a lot of the book was not new to me the explanation of the T-rex score was exceptional. What a great way to let the common investor understand the concept of fees. This book got me so excited I was going around work recommending it and I know of 2 purchases from that. I then gave the book to my daughter who is just starting her work career and told her that there was $200000 of information in the book for her. Great job.
So wonderful to get such great feedback! Thanks Mary………..and thanks for spreading the good word!!