Expert: Steven Taylor - 12/25/2011

Question
Hello: I am nearing retirement,and I have a managed investment portfolio consisting of the common and preferred shares of conservative Canadian and U.S companies.My adviser works for a large brokerage firm,and is good at keeping me in the loop as to changes in positions in my account,but to tell the truth,I am having difficulty determining if I am making an adequate return year over year.The account fees I am paying are based on a percentage of my portfolio's worth,and cover commissions on trades,and all other expenses.A large part of my difficulty in determining returns comes from the fact my adviser periodically will recommend selling a position and buying another similar equity because the fundamentals are better than those of my current position,and the technical indicators favor a switch.I guess I prefer the Warren Buffett approach of sticking with a sound investment until there is good reason to move on.I have discussed this over the years with my advisers,but it seems to fall on deaf ears.
Because of this,I have been subscribing to the Successful Investor newsletter for about 10 years now,and have been playing with the idea of hiring them to handle my investments through the Successful Investor Wealth Management Inc service.As you may know,Pat McKeough,the gentleman who started the Successful Investor newsletter,is a "buy and hold" type like Buffett,and has earned a reputation as a successful financial adviser.
I'm sorry to be so long-winded,but I was wondering if you know of a website that would allow me to plug in the numbers to see if I am making an adequate return with my present adviser.Thanks!

Answer
Michael, that is a very good question. I am very surprised your account statements do not already include that information. It is typical that in a managed fee arrangement as you have that the annual gain/loss percentage is provided in the year end statements. If it is not, then that is certainly another issue with your present advisor.

For website, you can try the Globe and Mail's main investor site (http://www.theglobeandmail.com/globe-investor/) as they may have the tools you need. However, the greater issue is that it appears your current advisor is just not compatible with your investment goals. There is really nothing wrong with that and it is not a black mark to switch to another advisor on that basis. I am not familiar with Successful Investor's wealth management service, but something to consider is paying an advisor fees based on a percentage of the portfolio's value utilizing a "buy and hold strategy". Buy and hold is not an active management style, and if you are paying a high percentage of value for active management, you are probably paying too much. If you really want to go with buy and hold, you might want to consider looking into an advisor who will charge you on an hourly or fee basis rather than on a percentage basis , as paying advisor fees for services you don't use can be a HUGE drag on your returns.