[Katie2529]

We have $50,000 in RRSP's with our bank at the moment. Over the last bit it has grown by $6,000. We moved this from Primerica a year ago and this is the first time in 10 years we have seen our investment grow.

Now here is the situation..... our life insurance agent wants us to move this money to him into a segregated fund. I love the fact that we are guaranteed our investment but our bank says that we are making a mistake by moving the money. I dont know alot about investments so I wondering what you would all do? Would you keep it with the bank or move it to a seg fund?

I have started reading on this but I am still confused as to what to do.

Please help me decide. Your input would be so appreciated.

Kathleen

 

[telephus]

What is your money currently invested in now?

I just looked up Segregated Fund on Wikipedia (apparently its a Canadian thing) and it doesn't look like the first thing I'd want to invest in, but it would depend on what the money is in now.

 

[TheKeswickBlogger]

You're finally seeing gains in your RRSP. Leave them where they are. Insurance agents/brokers need the commissions and do not necessarily have YOUR best interests at heart. We have life insurance. We have a separate financial advisor, not affiliated with any banks to handle our RRSPs. We do not pay him out of pocket, the investment companies do and he has performed WONDERFULLY for us. Our last one didn't lose us money, but wasn't actually helping our RRSP's grow either, so we found someone who would. Insurance companies and banks always have their eye on their own BOTTOMLINE. You have to keep your focus on yours. :remind:to watch your :cents: (even though our government in their infinite wisdom has removed the penny from our cash flow, it still exists on paper) :applause:

 

[Katie2529]

ThekeswickBlogger: yes, the first time ever that we have seen growth. We were more then excited to finally see that. We don't pay the bank out of pocket either, I belive their handling fee is 1.25%. In order to even be able to transfer this money to the bank(from Primerica a year ago), we need a minimum of $50,000. In the one year, we have had a growth of $6,000.

How did you find "someone who did"? How do you "interview" for something like this? They are all going to tell us what we want to hear. Who do you trust? I know everyone is out to get our money and make commissions off of us. This is such a hard choice to make. But after some reading today and asking for input on other forums I think the census is to leave the money with the bank for now. At least until we educate ourselves.

Telephus44: Honestly, I am unsure. But, I am going to call my bank and find out. I beleive it is mutuals. I am going to get her to go through the process, where our money is funded and what the rate of return is.

I had no idea there was so much to this... OH MY GOSH... My head hurts.. LOL

 

[Toffeekit]

Katie2529

In the UK all financial institutions have Compliance Departments which consider every transaction in the light of whether, at some vague time in the future, the institution might be challenged, in the courts, with "mis-selling".

Surely this is also the case in the USA?

If so, this would mean that the Insurance company your life insurance agent works for would have to review any financial commitment you proposed (with a 14-day cooling off period, I presume, also like here in the UK) and would, in law, have to tell you if, in the opinion of their lawyers, it was POSSIBLY NOT in your best interests to make this deal.

Once a Compliance Department says that, in fact they generally refuse to proceed with the deal – fear of being taken to court at some later date and accused of mis-selling products (with huge fines imposed, as a result).

Do you not have such a system in the USA?

I didn't know WE had, until I had a proposed deal refused myself, on the grounds that, at some distant time in the future, those inheriting under my Will – i.e. when I was no longer around to explain my decision – could probably and legally challenge the investment company with mis-selling. It is a way the companies have of trying to protect themselves, but it also serves as a bit of a red flag to an investor.

IFAs (Independent Financial Advisers) should be independent enough to be "fee only" – which means they have a scale of charges which you, the person consulting them, pays; they aren't getting a cut from any other financial provider. They surely must advertise? Check on their websites to see if there are any customer complaints against them.

Your bank isn't independent: they want your investment. Your insurance adviser isn't independent: s/he wants the commission on your deal. To get independent financial advice, you will have to pay for it. Best to have the charges up-front.

 

[CookieLee]

I don't know about this part of Canadian law but I will post to emphasize the first rule of investing ... If you don't completely understand the investment - how you will make money and how you could lose money - then DO NOT invest in it.