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Investing: Should you go it alone or go to an adviser?

It’s never been easier to get into the stock market. You can invest online, through an adviser and at your branch. You can buy stocks, mutual funds, exchange-traded funds, fixed-income and more. Investing is so simple that it can be overwhelming. Where do you start? What should you buy? How much do you need?

Novice investors will likely want to start with an adviser. They understand the market and know which products are the best. It’s also their job to make your money grow, which is hard for most people to do on their own.

Some financial planners, such as bank-based advisers, are free, though others can be expensive, depending on what you want them to do. Many charge a flat fee that includes investing and developing a financial plan.

As well, advisers typically invest in mutual funds, which comes with a hefty management ratio. Usually, a mutual fund company will take around two per cent of someone’s invested assets to cover expenses. If you don’t know what you’re doing, though, it’s worth paying for the advice.

Savvier investors often buy securities online. Every bank has its own web-based brokerage, but there are other firms, such as Qtrade, Interactive Brokers and Questrade, that offer similar services.

Do-it-yourself investors often buy stocks and exchange-traded funds — a basket of stocks that track a specific index — that don’t come with the same management fees as mutual funds do. (Stocks don’t come with any management costs.) There is a trading fee, but, depending on how often you trade, it can be negligible. Per trade costs range between $6.99 and $29.99 — it varies on the bank and how often you buy and sell — but it’s often cheaper than buying mutual funds with an adviser.

Once you figure out how you want to invest and with what products, you need to decide what type of account to use. Registered Retirement Savings Plans (RRSP) are still the most popular investment account, as you only have to pay tax on the total account balance when you withdraw, likely in retirement.

Tax-Free Savings Accounts, which were introduced in 2009, are giving the RRSP a run for its money. Whatever you invest in a TFSA grows tax-free. While you don’t get a tax refund, like you do when you invest in an RRSP, you don’t have to pay the CRA when you withdraw.

There are also non-registered accounts that offer preferential tax treatment on capital gains — the difference between what you bought a security for and what it’s sold for — and dividends. Most people turn to non-registered accounts after maxing out their RRSP.

See what I mean about choice? It’s amazing anyone invests in the stock market at all. But don’t get flustered; investing really is easy. Check out your bank’s online brokerage account to see what DIY investing has to offer, or talk to a financial adviser for more hands on help.

Whether you invest online or with an adviser, there are plenty of great websites that offer investing advice. Here are three to check out:

It’s one of the best investing sites out there. Get in-depth analysis and performance information on stocks, mutual funds and ETFs. Keep an eye on your investments via the online portfolio tracker tool.

Globe Investor

For daily Canadian investment news, visit the Globe and Mail’s investing website. Read stories about the Canadian markets and use its stock screener to find the best buys.

This U.S.-based website offers investment and portfolio strategy ideas, macro economic news and detailed company write-ups. Everyone from the novice investor to the savvy trader will find something useful here.


Bryan Borzykowski is a Toronto-based financial writer and the author of Building Wealth All-in-One for Canadians for Dummies. Contact him at or follow him on Twitter @bborzyko.

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