How AI Legalese Decoder Can Help You Decide If You Should Break Up With Your Financial Advisor
- June 5, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Deciding on Financial Advisor While in Medical School
I have had the same financial advisor since I was just 15 years old, following the passing of my parents. Throughout the years, he has been instrumental in managing my parents’ investments left to me, which has ultimately helped me accumulate a substantial amount of wealth. Currently, I only have around $40,000 left in investments, which I will need to rely on to cover my expenses during my time in medical school.
Having recently been accepted into medical school, I am faced with the dilemma of whether or not to continue working with my financial advisor. With the next four years ahead of me dedicated to my medical education, I will not have additional funds to invest during this time. Instead, the remaining money will go towards rent, tuition, and living expenses, with assistance from grants, scholarships, and OSAP.
Considering the circumstances, should I withdraw all funds from investments and keep them in a savings account? I have come across recommendations in various discussions pointing out that paying for a financial advisor is usually justified with assets exceeding $100k.
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****** just grabbed a
The advisor isn’t going to care much losing a 40k account, honestly probably a blessing for them to lose the time commitment. Just have an open truthful convo about what you want to do.
What’s the advisor even doing for you now
You are a Canadian Med School student so you will get some lectures and talks from MD Financial (now affiliated with Scotia), they will and can be your financial advisor if you want for a bit.
People like to complain about MERs and stuff (I think they are like 0.9% if you have no networth give or take), it’s true when you have actual money you’ll probably need to move off them, but if you are like most medical students you are financially illiterate, don’t have much to invest (they can help with your debt understanding), and won’t have the time to sort out your finances until like your 1st or 2nd year of practice. They (depending on the advisor) can be helpful, they are salaried and not commission based.
You can end your relationship with your advisor and still keep in touch if you’d like.
You should probably move your 40k into a high interest savings account or you can put it in like a high interest ETC like Cash.to in your TFSA. Ask your advisor to transfer ‘in cash’ to Wealthsimple or something alone those lines. You won’t have that 40k in probably 2-3 years? You can ask for your med school for assistance in funding like any other schooling.
You’re going to be approved for a professional line of credit 0.5% under prime.
In residency you make like 50-70k a year and have reasonable benefits depending on your province.
How much is your advisor charging you?
Your advisor likely had access to better high interest savings accounts / cashable gic rates. It they have access to a 4.5% HISA (like DYN6000) you could keep your money there and draw on it as you need
The advisor is likely making next to no compensation, but might be happy to maintain the relationship and provide ongoing advice as needed
There is absolutely zero info provided for anyone to be able to determine your best course of action here. Is this advisor paid an hourly rate? is he a fiduciary? does he earn commissions? what are your total management expenses?how are your investments performing and what types of vehicles does he have you invested in? How is this structured – i.e. as a corporation, in a trust etc?
In your case I don’t think it’s necessarily about having a minimum balance to choose to use a FA or not, it’s about what kind of investing you want to do.
Cfp here: if you are paying by % only then i think they would be over the moon if you break up with them lol
If you have $40K left that you are going to need in the short term, that money should not be at risk at all and should be in a liquid high interest savings
Sounds like you want to use this money for your expenses in the upcoming year, so it would make sense to just move it to a high interest savings/chequing account like wealthsimple cash.
TFSA over savings account depending how much you’ll be using per year (or at least the bulk of it). Your money can keep growing tax free
I’m guessing all that’s left will be used to pay for school, so yeah makes no sense to keep a financial advisor when you’re going to be in debt anyways… I’m sure he understands. If you did think he did a good job, maybe take a look at using him when you have something to invest.
How is your financial advisor being paid for the services he provides/has provided? Commission on mutual fund sales or something else? It could be that due to the age of your account, and that you are mainly drawing it down, that his services aren’t actually costing you anything (eg, he may have made his commission when you first took over or when your parents first invested with him).
This sub Reddit is notorious for hating on banks, financial advisors or financial planners. At the end of the day, you need to understand several things, is the advisor helping you plan your future? Also, what fees are you paying. Do you want to do investments yourself, if not, having a professional helping you is not a bad idea. Road to being a doctor is hard work, you will not have time reading about investment tactics. I read some of your comments, the advisor has helped you made a lot of money in the past, so he has provided you with help. Schedule an appointment with him, and talk about what you want to do. If you want a second opinion, look for a financial planner to help you with your investment goals can be of help.
Depends on your fee structure. You may need that money during med school, so the account will likely go to zero. I’d keep the advisor around though. After med school you’ll want to work with them again if they were any good.
Yes. Unless you are getting gains (after cost) better than a basic ETF (speaking as a person that caught his advisor recommending underperforming products that gave the best kickbacks to him).
I am pretty certain you could beat your fincal advisor with just xeqt vfv and cash. Those are etfs. Buy them and get rid of advisor as they are advising you how to they can make money off you.
Advisors don’t get paid on accounts less than $250k generally and if it’s with a big bank they generally want $1mm as a minimum, but $2-3mm to be “interested”.
The relationship no longer makes sense for either of you.
If u passed all the exams, yes u’ll be financially stable cuz ull have a very high paying job. What happens if u dont?
The savings account is a good idea for your short time horizon. Now with interest rates higher you can make money while withdrawing it as you need it. This also eliminates market volatility.
It’s better to cut losses with your current financial advisor. He is very likely to contact you in the future rather than you doing so
It sounds like they’ve been a decent person and you don’t have a problem with them and they’ve helped you out. Have you asked them what they’d like you to do and what they think?
Wealth simple cash with their cash card. 4% interest at least while you’re still using it as a checking account.
Most ETF are pretty safe, and provide an average return between 5% and 20% while often under 0.5% annual management fee.
Theres not enough context here. We would need to k ow what kind of returns you were making in the past
I would find a different one later who specializes in high net worth individuals.
financial advisors are honestly the most useless jobs. You only really need one if you are ultra wealthy and have like millions in the bank
.ending a business arrangement doesn’t have to mean the ending of association
.you can pull out from finance but maintain the social relation, if the dude seems solid and capable
.you my not have the room to invest right now, but will you never dip your toes in it? knowing a reliable guy when you have the room to start over is advantageous
What is his rates? Probably around 2%. In which case, dump him.
You can put it in cash.to in questrade, and just withdraw $ as you need it.
How much money did they leave you?
dont need advisor until at least 500k, pref 1M. mostly a scam otherwise
Remember
Banks are NOT your friend . They look out for the bank .
I was using the same financial advisor my father uses. I have over seven figures in my investments.
One day I saw my father’s investment statement.
We had the EXACT same investments .
He’s 90. I’m FAR from 90.
One day I noticed an investment lost around 50%. I called my advisor. He said we will continue to hold . Couple weeks later it dropped another 25%. I’m like wtf . He was more of what’s the big deal ??
It’s only 00.25% of your investments. Then I realized we’re not on the same page . I worked extremely hard for my money . Two jobs , overtime etc .
I finally parted ways . No big fuss. I took back managing my account
The best financial advice I can probably give a med student – once you’ve started school, join the Physician Financial Independence (Canada) group on Facebook. You’ll have to have a friend invite you as it’s a secret group. You can PM me and I can send you an invite, but you’ll need your student number etc.
The 2nd best advice for a med student who will not have family support – interest rates are not what they once were, and ignore anyone who tells you your debt will be “gone in no time” after residency. There have been many more recent posts in the group I mention above about residents who are struggling just to keep up with the interest on their maxed out LOC after not being careful about spending in med school. Just tuition and basic living expenses can be alot.
I don’t think he was as big a help as you think if you’ve blown thru it and only have 40k left. You have blinders on – don’t feel bad about finding a new one
You only have $40k left? What was the size of the estate?
Tardeau and jugmeat will tax you into oblivion. You’re screwed.