The Fleecing Of Naive Canadians Continues

RBC hits record $12.4 billion!

"The Toronto-based bank saw particularly rapid growth from it's wealth management business for the year ended Oct. 31, as the unit recorded a 23-per-cent increase in its earnings compared to fiscal 2017, rising to nearly $2.3 billion".

The wealth management business generates huge revenues garnered from managing their clients money. Mostly earned from the fees (hidden or not) that they charge their clients. A 23% increase over one year. Think about that. How have your investments fared over the last year?

As my friend Larry Bates, in his new best-seller, Beat The Bank, so succinctly puts it "Old Bay Street bosses require the vast majority of their national sales force to offer only products with high, and often hidden, fees."

For fun, lets look at the RBC balanced fund:

The value of this mutual fund is over $5 Billion (as of Oct. 31, 2018). $5 Billion of RBC client money.

As best as I can tell, over the last year, to Oct. 31, 2018 this fund has brought a return for investors of -3.8%. while at the same time charging investors in the fund 2.15% (MER).

Here is what they say about the MER (note the fine print!):

1) no sales charges (no load)

2) You don't pay expenses directly. They affect you because they reduce the funds return. (i.e. you don't get the tax deduction).

I think Larry has a point. 

"Their relentless marketing machine plays on this insecurity, bombarding Canadians with a smokescreen of complexity, bewilderment, foreboding, false salvation aimed at convincing you to:

1) Distrust yourself (you are incompetent)

2) Trust us (we will save you)"

And we pay dearly for it.

I do try to spread the message that there are equally protected alternatives for investors and they can be "Do It Yourself" (DIY), "Assemble It Yourself" (AIY), Robo (no personal service) or if you like a human being to care for you (at a very reasonable cost) and with fiduciary responsibility to you, a portfolio management firm (like High Rock), who can provide you with a plan (Wealth Forecast prepared by a Certified Financial Planning pro), an investment strategy for the long-term (you are likely going to have many years left on this planet) and guide you with regular monitoring, updating and perhaps even hand-holding through the more difficult moments so that you can stick to your plan.

Save yourselves (and help out your friends too) from the high cost, low touch world of the very profitable "Old Bay Street" banks and financial institutions. Seek out the alternatives.