If you can afford it, paying an investment council to buy and sell securities on your behalf could be a cheaper way to play the market. Most of the financial industry is made up of advisers—they can only purchase stocks with your permission and large management expense ratios on the funds they buy in to can eat up your returns. “They’re sales people,” says Warren Mackenzie, president of Toronto’s Weigh House Investor Services and author of New Rules for Retirement.
Investment councils operate on a discretionary basis. Their fund managers create portfolios that suit your needs and risk profile and do all the investing on your behalf. “They make changes necessary to manage money,” says Mackenzie. Typically, people need to invest about $500,000 to access an investment council—some of the bigger name firms include Gluskin Sheff and Leon Frazer & Associates—but fees are lower, about 1% to 1.5% of total assets, instead of a 2.5% fee on an individual mutual fund, says Mackenzie. If you’ve got money and trust the pros to manage it, then this is one way to keep more dough in your pocket.
(Research, editorial and spiritual support provided by Bryan Borzykowski)