Please help me decide if we should switch financial planners
May 8, 2013 12:59 PM Subscribe
Canadian financial question: My wife accidentally overcontributed to her RRSP by quite a bit. Is this something our financial advisor who set up the transaction should have caught? If so, is it worth the hassle of switching?
Before we were married, both my wife and I independently set up RRSP and TFSA accounts with separate financial advisors (neither operate on commission; we were able to meet with them through family connections). Since getting married, we've maintained the separate accounts just because of the hassle of migrating everything over to one provider, and both seemed to be pretty helpful and competent. Both advisors have suggested similar investment strategies and our returns have been okay.
Last fall, we had some extra money and decided to put it in her RRSP without realizing it was well over her contribution limit. It's over the $2k excess allowed by the CRA, so we'll have to pay a penalty to fix this problem. We've already taken the necessary steps to fix it, and we definitely won't be making this mistake again.
I'm kind of annoyed with her financial advisor, though. In retrospect it seems obvious to me that we should have put the money in her TFSA instead, but the advisor didn't ask us any questions about our contribution limits. She was prompt in helping us figure out how to fix the problem, but did not apologize at all.
Is this something she should have caught? Is it a red flag for dealing with her going forward? Is it worth the hassle of switching? Moreover, are there good or bad reasons for consolidating our accounts with a single advisor? Thanks in advance!
Before we were married, both my wife and I independently set up RRSP and TFSA accounts with separate financial advisors (neither operate on commission; we were able to meet with them through family connections). Since getting married, we've maintained the separate accounts just because of the hassle of migrating everything over to one provider, and both seemed to be pretty helpful and competent. Both advisors have suggested similar investment strategies and our returns have been okay.
Last fall, we had some extra money and decided to put it in her RRSP without realizing it was well over her contribution limit. It's over the $2k excess allowed by the CRA, so we'll have to pay a penalty to fix this problem. We've already taken the necessary steps to fix it, and we definitely won't be making this mistake again.
I'm kind of annoyed with her financial advisor, though. In retrospect it seems obvious to me that we should have put the money in her TFSA instead, but the advisor didn't ask us any questions about our contribution limits. She was prompt in helping us figure out how to fix the problem, but did not apologize at all.
Is this something she should have caught? Is it a red flag for dealing with her going forward? Is it worth the hassle of switching? Moreover, are there good or bad reasons for consolidating our accounts with a single advisor? Thanks in advance!
I don't personally use a financial advisor but if this is the only thing they've dropped the ball on and you are otherwise getting value for your money, then it may not be worth the hassle of changing advisors.
If I were in your position, I would consider if you're happy overall with the service provided. Does your advisor ask about significant life events? Do they revisit your investment mandate yearly? Do you understand the fees associated with the products you're invested in? Is this the only mishandling you've experienced? Do you understand the performance of your portfolio versus the agreed upon benchmarks? Would you like more financial sophistication?
This by itself is not a red flag, you will have to consider your history with the advisor and the sort of financial management he/she provides. If they're just selling you the bank's mutual funds, then the value add is pretty low. Consolidating your investments will probably reduce costs but that's really hard to say without knowing a lot more about your portfolio.
posted by tksh at 3:23 PM on May 14, 2013
If I were in your position, I would consider if you're happy overall with the service provided. Does your advisor ask about significant life events? Do they revisit your investment mandate yearly? Do you understand the fees associated with the products you're invested in? Is this the only mishandling you've experienced? Do you understand the performance of your portfolio versus the agreed upon benchmarks? Would you like more financial sophistication?
This by itself is not a red flag, you will have to consider your history with the advisor and the sort of financial management he/she provides. If they're just selling you the bank's mutual funds, then the value add is pretty low. Consolidating your investments will probably reduce costs but that's really hard to say without knowing a lot more about your portfolio.
posted by tksh at 3:23 PM on May 14, 2013
« Older What's the best proxy service for viewing BBC... | Please help me with my sports addiction Newer »
This thread is closed to new comments.
posted by looli at 7:36 AM on May 9, 2013