Financial Advisor returns

[grampafunk]

Was reading through another thread which got me to thinking.

For those who use a financial advisory. What kind of returns are you seeing. I went back and looking at my last 5 years and are averaging around 6% for a full managed portfolio. Feels low to me.

[Twin_Cam_Turbo]

10-13% every year but 2022 for the last 5 years.

[vengie]

The last couple years have had some dips, but 10+ on average.

Plus much more sound financial advice outside of my investments.

[finboy]

At what dollar figure did everyone go financial planner over self directed?

[bjstare]

Those posting %return should also be posting other contextual info. Like what did you tell your advisor your risk tolerance was?

[Darkane]

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Those posting %return should also be posting other contextual info. Like what did you tell your advisor your risk tolerance was?

Great post.

[Twin_Cam_Turbo]

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Those posting %return should also be posting other contextual info. Like what did you tell your advisor your risk tolerance was?

I’m low-medium risk tolerance. Went with an advisor when my accounts hit ~150k saved.

[Gainsbarre]

In addition to risk tolerance, it depends heavily on what your advisor is investing in. If it was entirely Canadian equities, then 6% is OK (not great, not terrible), as the TSX averaged an annual return of about 4.6% over the 2018-2022 (inclusive) period. However, 6% vastly underperformed the S&P 500 (~9.3%) over the same period, so if your advisor had any US (or international) equities, then yeah, 6% is lousy.

Last I checked, there was consensus among academics that passive investing beats active management, so index funds are likely the better option rather than sacrificing 1 to 1.5% for some active portfolio manager who likely doesn't know what the hell they're doing. For a laugh, watch Market Call on BNN Bloomberg, specifically the "past picks" segment, where -30% (or worse) is not an uncommon sight for these fund managers and their "top picks" from 12-18 months ago. It's also reassuring to hear from these bozos how they got out of a long position sometime mere weeks after touting a stock as a "top pick" on television (I guess you had to be lucky enough to employ them to get the heads up on when to bail from the stock). For good financial advice read "Millionaire Teacher" by Andrew Hallam - he's a strong advocate for investing in low cost index funds.

As for myself, I manage my own investments and have (miraculously) outperformed the TSX with my Canadian investments for 5+ years now. My streak is likely to end this year with the underperformance of telecom and bank stocks (TELUS/Rogers/Bell/the Big Six banks have long been a big chunk of my portfolio).

[vengie]

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Those posting %return should also be posting other contextual info. Like what did you tell your advisor your risk tolerance was?

I have mine structured as low/med for long term growth and a small position of high risk.

[Gman.45]

Same as others here, for the $ I have invested in the market, low-med risk, more on the low side, and avg roughly 10-13% over the last 5/6 with the exception of one year that was 7%. I'm one of the crazies that has a lot of my portfolio in gold - not gold stocks, gold coins/bars/etc, I've been buying it since it was sub 300 USD/oz, and have slowed substantially in the last couple years, but still have a double digit (just) percentage of my $ sitting in that shiny metal. It's done well enough over the 25 years I've been buying it.

My uncle has been my financial adviser for a couple decades now, and the team he's handing it off to when he retires shortly are as good and trustworthy as he has been (family as well). The market investments are in pretty solid funds/etc, and I don't lose sleep over the fees and costs involved in having them do it instead of doing it myself.

[Disoblige]

Whatever employer uses w/ lower fees. Set it and forget it based on your risk tolerance.

It doesn't need to be that complicated and honestly an advisor doesn't really do much. It's like getting someone to do your taxes. You could, or you could spend 30 minutes to an hour doing it and at the same time educating yourself. I'm simplifying things a bit, but really it's not that hard. My RoR is 14% and I literally clicked a couple buttons based on a low to medium risk fund.

The question that interests me more is how much rainy day fund people have laying around vs. Invested. I'm talking about literally just keeping it in HISA doing almost nothing in case you need it in a flash. You would be surprised how many people have quite a bit. Not saying it is wrong, it is just different people in different situations and ways of thinking.

[91_Integz]

This poll means absolutely nothing without context.

At the very, people should share what % of your investments are in fixed income relative to equity. Anyone saying they are "low risk" with 10% returns doesn't actually know what they are invested in, and if those are your expectations long term, you will 100% be disappointed.

To answer the original question, if your annualized rate of return over the last 5 years is 6%, and you're in a 50/50 balanced DIVERSIFIED portfolio, I would say it's performed perfectly fine, and in line with long term expectations. Returns in excess of this either have a higher equity allocation, or have had a higher concentration in US equity/tech over the last 5 years. Some may say luck, some may say skill....

[Pacman]

Getting similar returns to those on here. However, I'm getting annoyed paying the 1.25% yearly fee as it's adding up to a lot of money each year. Thinking of just sticking the money in some funds and monitoring on my own.

[riander5]

Everyone should read one book and simplify this for themselves

[max_boost]

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Whatever employer uses w/ lower fees. Set it and forget it based on your risk tolerance.

It doesn't need to be that complicated and honestly an advisor doesn't really do much. It's like getting someone to do your taxes. You could, or you could spend 30 minutes to an hour doing it and at the same time educating yourself. I'm simplifying things a bit, but really it's not that hard. My RoR is 14% and I literally clicked a couple buttons based on a low to medium risk fund.

The question that interests me more is how much rainy day fund people have laying around vs. Invested. I'm talking about literally just keeping it in HISA doing almost nothing in case you need it in a flash. You would be surprised how many people have quite a bit. Not saying it is wrong, it is just different people in different situations and ways of thinking.

It’s all discipline
Developing relationships with adviser and accessing things good too
Stick to the plan
My portfolio is 50% veqt and 50% xqq - beats the spy thank you tech lol
But my one bet on tlry fked me up good lol if I had an adviser I probably wouldn’t have went so heavy lol bye bye the gains from last few years lol

Heloc for emergencies - ez pz

[Ekliptix]

I like the idea of paying for someone to manage mine, but the bank-managed performance has been meh in my experience so far. I should look into switching plans, or maybe advisors.

Managed
(RSP) 6% average over 7 years - A mix of US, Canadian & global equities. Very meh performance.

Self managed
(TFSA) 17% average over 5 years. Most the gains were 2020-2021, dumb luck.
(RSP + non registered) 10% average over 20 years. Mainly PPL and BMO bought 20 years ago (thanks Mom).