Investing property proceeds
There are certainly advantages to investing in a portfolio that offers you preferential pricing. Although with many firms this starts as low as $100,000, you really see the benefits of this once your portfolio exceeds $250,000 or more.
There are several concerns that should be addressed to your satisfaction before you proceed.
The first is cost. I’d recommend you find out just how much this elite pricing will save you over the retail cost. Be sure to compare annual investment management costs in addition to commissions and/or fees.
Also consider diversification and if one investment pool can really offer you the diversification that you need, particularly with a larger account.
It’s important to verify if this investment pool is a proprietary investment that is only offered by your adviser’s firm. Not only is there the potential for conflict of interest with an “in-house” product, there may also be large tax costs to transferring the portfolio in the future.
Ask your adviser if his firm offers a fee-based portfolio for you to consider. Not only does a feebased option provide preferential pricing on larger accounts, it also can be applied to a diversified portfolio and clearly unbundles the cost of advice and product, so you can readily see what you are paying for investment advice.
This article provides general information and does not constitute financial or other professional advice. Seek independent advice before implementing any of the strategies discussed. Imran Syed, BA CFP CFSB TEP, is an independent, fee-only certified financial planner and can be reached at feebasedadvisor.ca. Send home-related, financial planning questions to homes@ottawacitizen.com.