I far prefer my self-directed RRSP but for reasons to boring to explain, I contribute a bit each month via a financial planner towards a couple mutual funds. Last week I had my first annual meeting. I wanted to know 2 things:
1. How much money did I make?
2. What specifically am I invested in?
In answer to #1, my planner said, “this portfolio grew by 10%” in the last year.
Ok, but how much did my investment grow? By 10%, said the f.planner, pointing out the market value of my portfolio.
“How much of that market value is just my own monthly contributions?” I asked, insisting that we find out the total of my contributions.
Get this: The market value was LESS than my total contributions made over the year! So much for the nice chart showing 10% growth. Turns out I actually lost money this year. (in contrast, my own stock picks have averaged over 15%).
Second, I wanted to know what I held. I have funds managed by Inhance, one of the socially responsible investment firms. I have a Balanced fund (part bonds, part equities) and a Global Leaders Fund.
“Well, they’re wrap funds,” said the financial planner, implying, End of Story.
fyi – wrap funds = funds that hold other funds inside.
“But I want to know, what do I hold?” I insisted again. So we did the legwork and I found out the major companies I hold – no real surprises, but at least I knew. The financial planner told me out of 2200 clients, I am the only one who ever asked him what companies are in my mutual funds.
Gentle readers: do you know what companies are in your mutual funds? Does it matter to you? Why, or why not? Also: do you feel comfortable having detailed discussions with your financial planner? Do you feel like you get complete, understandable responses to your questions?