​ You trust your bank. They care for you, right? They do what’s best for you? I’m afraid they don’t. The banks do not put you, their customers, first. Their main duty is to their shareholders. Recent scandals about hidden fees and blatant misinformation given to customers about their financial products has demonstrated one thing; you can’t trust them.
They were fully aware of how they were operating and didn’t bother to do anything to address the problems until they were exposed for it. It’s time to stop being the customers of the big banks and investment companies and to become the shareholders that they are looking out for. I will show you how.

The scandal of overcharging
Canadian banking customers have been systematically overcharged by the banks for years. Back in 2014, it emerged that Toronto Dominion (TD) bank had been directly and indirectly overcharging customers for financial products. They claimed that ‘internal errors’ had led to a situation where they failed to inform clients when they qualified for lower fees on their investment products. This resulted in some 10,000 customers being overcharged over a period of 14 years.
If a client gets recommended to a fund, they can expect to pay higher fees initially if they have a small investment. If they add to their assets over time, by selling or inheriting a house or a business for example, they should qualify for a product with lower fees due to their larger investment amount.
What was TD’s reason for overcharging? It was not any more work for them. When they finally admitted it, they didn’t do so out of altruism, they did it because they knew they were guilty. It took them 2 years to report it to the OSC in the first place. So, they didn’t rush! The bank eventually agreed to repay more than $13.5 million to clients and $650,000 to the OSC as a settlement cost.
The other ‘errors’ the banks have been brought to account for is so-called ‘double dipping’, where customers were effectively charged fees twice on their investments. Clients had originally been sold an investment product with an embedded fee (or MER), then later as their account grew, they were moved to a part of the bank that charges a fee based on a percentage of what you have in your account.  This should be a good thing for clients, as technically, the more money you have in your account, the less you should pay in fees. But if the new sales rep has been a bit lazy and doesn’t reorganise the old investment, the client can end up still paying the embedded fee and a fee on the new money added. Companies are supposed to get an embedded commission or a percentage of the account, not both.
The OSC found that between 2000 and 2014, TD clients had been overcharged by $1.7 million. Another bank, CIBC agreed to repay $73 million dollars to over 80,000 clients who had been charged double fees on their investments since 2002.
These banks scammed millions out of clients yet they expect us to believe that these huge amounts of money were simple ‘oversights’. They expect us to believe that somehow, these big corporations with their huge IT systems and Compliance departments missed these errors for 15 years!
Every product sold is checked by a branch manager and a compliance manager to check that everything is suitable. Why did nobody say anything? Simply, it suited them not to.

The banks aren’t working for you
Are the banks suddenly feeling ethical by voluntarily repaying overcharged fees? Of course they aren’t. If 2008 taught us anything it’s that the big banks don’t work for us. They claim to have cleaned up their act, then scandals such as these just serve to prove that they haven’t. They act as if they are untouchable and have a blatant disregard for their clients. They do what they like and assume that you are too naive and trusting to notice. They give you statements on your financial products which are long-winded and confusing. Don’t think that this is by accident. They want to keep you in the dark and they make you feel like you are stupid if you ask questions. How many more ways will Canadians be fleeced by an industry who simply does not serve the best interests of its clients?
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Work with a financial planner who will put you first
The big banks won’t change; in fact, they do anything to resist it. If you want things to change, you need to bring it about yourself. It’s time to stop being apathetic and putting your trust in the big banks. Instead, take control and seek advice from a financial planner who truly works for you and represents your family’s best interests. I will tell you the truth. You pay me for the advice I provide, not for a product I’m trying to sell you. Whether you are rich or poor is of no significance; someone with $50k could have more complicated needs than someone with $500k and whether you’re the former or the latter, you will struggle in the present system that makes it hard for people with a small account to become wealthy and rips off the person with the big account.  It’s your money, you need transparency and you need answers. I can help.
Call me for a complimentary 30-minute appointment to find out more. 306 535 2255  k@yournwm.ca 
 
 
 

Kathy Waite says 100 years of academic research explains why your mutual fund isn't working consistently and why its so hard to pick the winners from the  losers. Stop looking for the needle in the haystack and buy the haystack . 
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The retirement dream for many Canadians is to be able to live comfortably; to pay off the house, be able to travel and work only if they want to, not out of necessity. But the retirement reality is often very different. Many people haven’t saved enough to support themselves comfortably in retirement. We are all living longer, and facing the real possibility of outliving our retirement savings.

Planning for retirement is not what it was. Gone are the ‘job for life’ company pensions, confidence in assistance from the government and knowing that come your 65th year, you can retire.

Worryingly, around 50% of Canadians are concerned that they will not have enough income to be able to live comfortably in their retirement. 3 in 5 people have no idea about how much money they will need to live on and 47% of those aged 55-64 have no company pension provision. This is a ticking time bomb.

If you have invested for retirement, the chances are you will find that your investments aren’t yielding the returns required to live comfortably. Why? you may ask. Because your gains have probably been considerably reduced by hidden fees and costs. Most Canadians are generally unaware of what fees and costs they are paying and are often shocked and upset when they discover exactly how much their retirement nest egg has been reduced.

In 2016 the Canadian Securities Administrators (CSA) introduced the CRM2 regulation to force mutual fund companies, providers and financial dealers into showing investors exactly what they are paying in fees each year. This will help to you have a greater understanding of how your investments are working for you, and ultimately will allow you to take control of your financial future.

What fees am I paying?
The fees you have been paying are usually hidden in the small print in mutual fund fact documents and prospectuses, and hidden behind financial jargon like ‘embedded trailer fees.’ The ‘trailer fees,’ put simply, are commissions paid to sales representatives by mutual fund managers in return for recommending their fund to you.

These funds usually have some of the highest fees in the world, so this practise clearly does not represent the best interests of the investor. The sales representatives will often say they are independent, but their licences are usually sponsored by an insurance company, bank or dealer and they are incentivised to sell their products, so it’s not strictly true. The problem is that most people will trust those with ‘financial planning’ designations so they don’t tend to ask questions.

What does CRM2 mean for you?
 Every year, your investment dealer or advisor must send you a report detailing the exact fees you will be paying and how much compensation you’re paying them. Whether you pay $100 or $10,000, you will know the exact amount.

Also, you will receive an annual report that gives a clear picture of how your investments are working for you. The report will detail your personal portfolio performance for the previous year and since opening your account. Before CRM2, firms were only required to provide you with information on the rate of return you could expect overall. This annual information will help you make sure that your investments are aligned with your best interests and long-term financial and personal goals.
Even though the regulation was introduced in the summer of 2016 , you may not be able to get the information right away, as most firms will most likely produce the reports on a calendar year basis. Most investors should expect to be able to access their reports from early 2017.

What does CRM2 mean for the financial industry?
It may seem like CRM2 puts pressure on financial dealers and advisors to prove that they are worth the fees clients are paying for their services, but aside from the requirement for enhanced reports, we should not lose sight of the fact that financial professionals should be helping clients understand their investments right from the start.

Advisors need to align their services and advice with their client’s goals. These goals are increasingly geared towards meeting personal non-financial life objectives. It’s all about forming strong relationships with clients to help them achieve their financial dreams. There needs to be a clear line drawn between offering a client advice that is going to work in their best interests, and merely selling them a financial product.

Most financial plans are a sales pitch disguised as advice. Someone knows what they want to sell you, and the financial plan will have the desired outcome; for them, not you!
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If you are fed up about being kept in the dark or of being misinformed, contact me, I can help you!
The philosophy here at Your Net Worth Manager, is ‘plans before products.’  I will work with you to set goals for your financial future, help you to figure out a solution to your problems, and above all, tell you the truth. That is what makes me different. There’s no conflict of interest or hidden fees, just the right advice for you, when you need it.