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Celebrating No. 500

Celebrating No. 500

June 27, 2013

This is my 500th article since the Dollars and Sense column began in 1992. It has been rewarding receiving your comments and informing you about practical advice about reaching your personal financial goals.

Sometimes I recommend taking action that is different from what current investment industry practices would suggest. Today we will look back at the more interesting and popular topics I have covered and look at what you can expect to read about in future articles.

One topic readers have an appetite for is articles on investment fees. In 1997, I wrote the first of several articles on this topic. I focused on this theme to help you understand the investment fees you are paying so you can determine if you are getting good value for those fees.

My comments do not in any way discount the need to pay fees. My objective is to make sure fees are disclosed and fair. In our current system, many fees are hidden making it difficult if not impossible to determine if you are receiving fair value. Consumers have the right to understand all of the fees that are being charged.

I have written many articles on the challenges and importance of planning for retirement. Life expectancy has increased significantly and more of us need to be financially self-sufficient for a very long time.

Financial stability is becoming more of a problem according to recent research. This is partly due to the dangerously high levels of personal household debt. The federal government has repeatedly warned us about the looming trouble of excessive debt. It is one of the largest economic risks facing Canadians.

The need to be proactive will be a theme in my future columns. The ultimate responsibility of financial success lies with you. Take charge of your finances so you will be able to afford your desired lifestyle.

Hiring a financial advisor and managing that relationship is an example of you taking the lead. The advisor works for you and the objectives you have should determine the scope of your discussions with your advisor.

Manage your investments the way you would manage your own business. You hire the experts by delegating specific tasks but the ultimate responsibility is yours. Consider having a written agenda prepared in advance of a meeting so your points will not be overlooked for discussion.

There are many topics to be covered in the upcoming months because the investment industry is going through significant changes. New rules are being implemented to foster improved communication and disclosure to individual investors. This will include better disclosure of fees.

Will Canada change the advisor client relationship to that of “fiduciary” which is a higher standard of care than what is now required from an investment advisor? This revision would be similar to the professional relationship between a client and their accountant or lawyer.

In my opinion, the importance that individuals place on investing combined with the complexity of investing requires everyone to have a higher standard of care. A fiduciary relationship raises the importance of the clients’ well-being. That alone would require many changes to the investment business.

It has been a pleasure writing this column. I hope you continue to enjoy and reap its benefits and I wish you every success with your investments.