Q&A: Financial advisors

Question: I have RRSPs with a Canadian bank. My portfolio is in the stock market, cash and equivalents, fixed income, Canadian short-term bonds, and various types of equities. I would like to know if the financial adviser is paid any fees for buying and selling or any transactions for my portfolio. – George V.

Gordon Pape answers: Of course. Advisors have families to feed too – they have to earn income from somewhere. All financial advisors are required to disclose exactly what fees and commissions they charge. All you have to do is ask.

If you don’t like the idea of paying a commission for each transaction, ask about a fee-based account. You pay a percentage of the value of the plan each year, typically 1% to 1.5%, but all transactions are free and you can purchase F class mutual funds which have lower management expense ratios.