Gail, I love your show. I record it every night! I'm just wondering if there's a (monetary) threshold at which I should consider moving from using the investing services at a bank (i.e. simple money market funds, mutual funds, etc.) to using a financial advisor who will tailor a plan to my specific situation, start investing in stocks, etc. If I move to using an advisor, do you have any opinion on the different payment methods for advisors... I don't know much about it, but I guess you can pay upfront fees or pay them every time they buy/sell stocks. MY SITUATION: I'm 36 and 10 weeks (and counting) from paying off my mortgage! I've been maxing my RRSP every year. When the mortgage is gone, I'll have low 6 figures in investments and will be in a position to invest an additional $3000 per month. Thanks for any advise you can provide!

What a diligent girl you have been and what a great position to be in. You should be very proud of yourself. Give yourself a hug.

Your question is actually quite a complicated one. There are lots of different types of advisors out there from the mutual fund seller, to the full service broker, up to the private investment counselor or investment manager. The one you choose is such a matter of personal preference and how much you want to spend in fees. Ditto the decision to go with an advisor who charges a fee upfront, versus one who charges by the trade. One is not better than the other – assuming you’ve found a good advisor. It’s a matter of what you’re most comfortable with.

Private investment management is usually available to people who have investment assets of $250,000 or more. Some houses won’t take clients with less than a million bucks. The idea behind private investment management is that once you have enough money to diversify your portfolio, you don’t need to use investments like mutual funds, since your investment counselor can build you a portfolio that exactly meets your needs for safety, income and growth, in any combination you choose.

I will tell you that regardless of whom you choose to manage your money, you should be aware of the fees involved. Whatever fees you pay will reduce the amount of capital working for you. A management expense ratio (MER) of 2% may seem small, but if your annual return is 8% before fees, you’ll have lost one quarter of your return to fees. Yuck! 

So your next question is probably, where do I go? Good question. And I can’t answer it for you. You have to do the research, ask the questions, figure out who you’ll be comfortable with. You can start by asking your financial institution if they have a wealth management arm, and see if you like anybody there. Failing that, get out your walking shoes girl. It’s time to do some serious shopping.