In my advisor I trust

A common mistake we see with investors is when they have all their money invested in their provider's house products. For example, let's imagine that you’re with financial institution XYZ and your XYZ financial advisor suggests you split up your money and invest in 3 funds : the XYZ Canadian equity fund, the XYZ Global equity fund and the XYZ Fixed Income fund. Now all your money is invested in XYZ products. For me this will always look very bad. Red flags everywhere. This will usually be the most profitable situation for the financial institution and won't often be the best situation for the client, even though they may all be suitable products.

In the investment world, there is a concept of suitability and another of fiduciary.

Suitability Standard only details that the advisor has to reasonably believe that any recommendations made are suitable for clients, in terms of the client's financial needs, objectives and unique circumstances.

Fiduciary Standard holds advisors to a standard that requires them to put their client's interests above their own. It consists of a duty of loyalty and care, and simply means that the advisor must act in the best interest of his or her client.

It’s very easy for the advisor to steer the client into the products that generate the most commission. That’s just human nature and you can’t be upset with such a thing. What you can do instead is make sure you stay away from such situations. Investors just need to be more aware and make sure they are getting the best advice, not just suitable advice.

Here is a (non exhaustive) list of top funds we put together per category.

You’ll notice that we see many different fund names on this list. Are you surprised you're not seeing XYZ show up in each category???

Take away : Are you fully invested in XYZ house name products? Is this the best advice for you?

For ideas on how you can find great financial advisors that will act in your best interest, you can check out this article.