April 1, 2024

Sometimes the quest for wealth isn’t so simple.

New ads for low-fee investment products are everywhere – you can’t even watch the Superbowl without seeing a few. These marketing campaigns are funny, but they certainly lack a new story line. Spoiler alert: the millennial allegedly wins by moving their money to a company that specializes in low-fee exchange traded funds(ETFs) or self-directed investing. Naturally, the commercials don’t highlight your expected rate of return based on your risk tolerance, emotional tolerance, or the foundational techniques required to build wealth.

Active management, tactical asset allocation, robust portfolio construction and investing with advice can all have a lasting effect on your investment performance and your peace of mind.

In fact, research has continued to show that, versus non-advised households, the average household with a financial advisor accumulated 2.3x more financial assets over periods greater than 15 years. Simply put, you are leaving a lot of money on the table doing it yourself.

Lower fees may be misleading assuming that:

·        All investments deliver the same performance

·        The fund with the lowest fees will always come out ahead

·        There is no intrinsic value gained from financial advice

Far too often, net returns get overlooked by investors as they focus on fees. We like to use the expression “don’t let the fee tail wag the dog” to explain this. For example, if Portfolio A provides a return of 9% before fees, and the fees are 2%, Portfolio A’s net rate of return is 7%. If Portfolio B provides a return of 4.8% before fees, and the fees are 0.20%, Portfolio B’s net rate of return is 4.6%. Assuming both portfolios have the same time horizon and are assuming the same amount of risk, Portfolio A will allow you to reach your goals faster. And remember, investment management is only one piece of the wealth building puzzle. Life’s milestones, events, circumstances and the unexpected – personally and professionally – will have an impact on your short and long-term financial goals. Change is inevitable, so having a plan in place, with a trusted advisor, who can shift and evolve your plan over time, can make all the difference. We put in the hard work for your money so you don’t have to!

In summary, there’s more to successful investing than just low fees. Reach out if you would like to have a chat about how we can help you build your financial legacy.

This information has been prepared by Jessica Mann, Wealth Advisor, iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this email comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.