Report on Business Article on Fees - Rob Carrick - "Help, My Adviser is Blowing Smoke on Investing Fees"
I no longer pay for a Globe and Mail subscription. I see it as almost an arbitrage as I get (most of) the paper for free on the Apple App Store.under the Globe and Mail. Avoiding "paywalls" wherever possible.
So if you have access to a hard copy, an on-line subscription or the iPhone App (the cheaper chicken - as a friend of mine says), you can read the article yourself.
Basically, the reader writes in to Rob stating:
"We've asked them many times about their fees and we never get a straight answer, and a few times have been told that it is too complicated to explain"
At High Rock, we think it is pretty simple, actually. In fact, we feel so strongly about fee transparency that it is part of our Voluntary Code of Conduct for the Stewardship of Your Wealth (: highrockcapital.ca/uploads/3/4/2/5/34254660/our_voluntary_code_of_conduct_as_stewards6.pdf)
By way of background, there are two types of Fees that investors will pay to invest:
So the question this reader/writer in Rob's article should ask her Adviser is "what Fees do I pay you and what are the total MER's I am paying if you buy me any structured products, etf's, mutual funds etc...anything with a Management Fee on it?"
And is the reader/writer in Rob's article speaking to an Adviser with an "e" or an Advisor with an "o"? And Adviser must have a fiduciary duty to their clients (High Rock is regulated as an Adviser) and an Advisor is an unregulated title that anyone can use. If this reader/writer has an Adviser, they sure better tell her what her fees are...that is the law! (Reminder -> Fiduciary Duty = Client's Best Interests at all Times).
Complicated slide, but this is what it would look like and it would require the Adviser to calculate all of the MER's the client is paying. Not rocket science so you should ask them to do the work. You have a right to know exactly what your ALL-IN FEES (Management Fees to the Adviser and MER's) are:
The key thing to understand is that there are new fee disclosure rules coming in but, in our opinion, they don't go far enough. In fact, I was interviewed for an article Barry Critchley wrote in the Financial Post back on June 2, 2015 (highrockcapital.ca/in-the-news.html) where I told Barry that the Securities Regulators were not going far enough on their new fee disclosure rules. The Adviser doesn't need to explicitly tell you what all the MER's you are paying add up to. These are those hidden or embedded fees that 99% of investors don't really understand so wouldn't it make sense that these fees be explicitly explained and divulged to the end client?
Now here is High Rock's fee transparency model:
And if that is not self-explanatory enough, here is a full and transparent explanation of our High Rock fees:
At High Rock, we go above and beyond the regulatory requirement on fee disclosure. Maybe that is why the Small Investor Protection Association (SIPA) has recognized High Rock as a "New Breed" within the investment community. Read Scott's blog on this from last week (highrockcapital.ca/scotts-blog/small-investors-protection-association-sipa-recognizes-high-rock-as-a-new-breed)
And if you want to see how fees can affect your portfolio over longer periods of time, have a look here or listen to our Private Client Intro Webinar here (highrockcapital.ca/private-client-division.html)
Stunning. Fees matter - a lot. Ask the questions of your Adviser/Advisor and make sure you get straight answers.
What is the benefit of High Rock's Private Client division? We are not Stock Brokers, Investment Advisors, Financial Advisors, etc...we are a Portfolio Management company with an Institutional Division where we manage money for a division within Scotiabank and some other small corporations. The synergies between our Institutional and Private Client divisions means that we manage more of our client money in-house so we don't have to buy mutual funds or structured notes/products with high fees.
Why not take the next step and explore High Rock's Private Client division? Listen to what we have to say about how we invest, fee transparency, client service, and our wealth forecasting. If you like what you hear and see, take the next step and avoid the middleman and the fees that go with them.