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A guaranteed way to instantly save on investment fees is to dump your adviser and switch to exchange-traded funds tracking major stock and bond indexes.

The fees advisers get for their work with clients can be in the 1-to-1.5-per-cent range. That’s money that would otherwise remain in the hands of their clients.

But there’s more to the math of switching from an adviser to index investing. Advisers ideally provide valuable services for the fees they charge, including investment management, financial planning and coaching. Be sure to factor this into the analysis of advice versus DIY.

I often get queries from readers about dumping an adviser to save on fees. Here’s the latest: “Today I read an article that reminded me that index funds might be a better way of investing than having an adviser pick stocks for your registered retirement savings plan. So, how does one set up an RRSP without an adviser which contains an index fund (or several of them)?”

DIY index investing in an RRSP or any other type of account can be done through any digital broker. Accounts can often be opened online. From there, you need to transfer cash into the new account, choose some ETFs and buy them using your broker’s website or mobile app. An ETF portfolio can be assembled with fees as low as 0.08 per cent, plus potential stock-trading commissions to buy and sell funds. No question, DIY index investing is a money saver.

Now, let’s go beyond fees with a look at five ways firing an adviser could work against you:

  • You don’t have a financial plan to guide your investing: Good advisers base their investment plans for clients on a financial plan that maps out how financial goals will be reached. Key points covered in a plan include how much you need to invest over the years and what return you need to reach your goals. In other words, how much risk you need to take on.
  • You don’t diversify properly: Too much in stocks could overexpose you to market downturns and tempt you to sell at low points. Too little in stocks could deny you the returns you need to generate.
  • You suffer from analysis paralysis: Overwhelmed by information, you let cash sit idle in your investment account. Expect zero interest paid on this money.
  • You think you can outsmart the market: Market-timing traps include going to cash because you hear a recession is coming, then waiting too long to get back into the market.
  • You stop adding new money to your account and miss opportunities to buy during market lows: Good advisers keep you on a regular investment plan and encourage you to take advantage of bargains when prices fall. On your own, you miss these opportunities.

It’s a complete no-brainer to say that DIY investing saves you a lot on fees compared with having an adviser. But what’s the value you get from those fees?