Q: Where can I get an unbiased review of my portfolio?
A: If you're asking this question, you almost certainly have doubts about the performance, risk level or cost of your current portfolio. Perhaps you are managing your own investments and want to know if you are on the right track, or maybe you are working with an adviser and wondering if the portfolio is serving your interests - or the adviser's.
There are a few different routes you can take.
Some certified financial planners (CFPs) and registered financial planners (RFPs) will review your portfolio on a fee-for-service basis. One RFP I spoke to charges $200 to $400 for a simple review, which includes an analysis of the portfolio’s fees, asset allocation and diversification. Others may offer a portfolio review only as part of a more comprehensive financial plan that costs significantly more. If all you want is a portfolio review, make that clear up front and ask what the review entails and request samples of reports provided to other clients. To minimize potential conflicts of interest, focus on planners that work on a fee-for-service model and don't sell investment products.
A thorough portfolio review - with evaluations of strengths, weaknesses and specific recommendations - will cost more. For example, 5iResearch, which owns Canadian MoneySaver magazine, offers comprehensive portfolio reviews for a flat fee of $1,299. You can find an abbreviated sample portfolio review on 5i's website at www.5iresearch.ca/portfolio_reviews.
Some financial institutions offer a free portfolio review (in the hope of winning your business, of course). WealthSimple, one of the growing number of online robo-advisers, offers this service.
Do you have a friend or relative who manages his or her own investments? A knowledgeable do-it-yourself investor will be able to give you an unbiased appraisal of your portfolio and may even welcome the opportunity to help you out. (Just be sure to return the favour by buying that person lunch).
A final tip is to do the portfolio review yourself and treat it as an opportunity to educate yourself. If you own mutual funds, look up the management expense ratios of each of your funds, which will give you a good idea of the annual cost you are paying (make sure to match the class of the fund you own, such as series A or series I, with the corresponding MER). If you own stocks, do they pay a dividend? Has the dividend grown steadily over the past five years? A growing dividend is usually a good sign. (Take a look at my model dividend portfolio at tgam.ca/divportfolio for some examples of solid, dividend-growing stocks. )
On the other hand, if you own stocks that don't pay a dividend and whose share prices have been going down or sideways for years, it might be a sign of excessive speculation or a scattershot nvesting approach that lacks a coherent theme. If something doesn't seem right about your portfolio - or if your returns haven't lived up to your expectations - it's time to investigate.Report Typo/Error