Connect with us

Investment

A new era of low-cost investing has arrived for Gen Z and millennials – The Globe and Mail

Published

 on


Words they live by in the investment industry: Small accounts get small consideration.

So it follows that the record of investment firms in welcoming young people as customers was pretty terrible until recently. The rise of digital investing – taking orders and sometimes providing advice online or via mobile device – has changed all that for the better by making small accounts more economical to serve.

Suddenly, there are all kinds of ways for young adults to get started as investors while keeping their costs to a minimum. There’s a free stock-trading app, and another app with zero commissions for investing in exchange-traded funds. Several online brokers offer special pricing for young clients that can reduce their costs significantly, and there are also robo-advisers to consider.

Story continues below advertisement

With a six-figure portfolio, paying $5 to $10 to buy stocks or exchange-traded funds is nothing to complain about. But for a young investor with a small portfolio, these costs are prohibitive. Biweekly purchases of a balanced ETF (more on these in a moment) at $9.95 per trade works out to an annualized fee of 1.7 per cent on a $15,000 account. For context, the bonds or bond funds in a portfolio might yield about 1 per cent these days.

Further costs for young investors might include annual administration fees of $100 or more for registered retirement savings plan accounts or $100 in account maintenance fees per year (often charged on a $25 per quarter basis).

Special deals for young investors are available at several online brokers, but they’re not well-publicized and thus easy to miss out on. Some examples:

  • For students, CIBC Investor’s Edge reduces its regular flat $6.95 commission for trading stocks and ETFs to $5.95 and waives the $100 annual fee on registered and non-registered accounts.
  • For investors 30 and younger, National Bank Direct Brokerage provides 10 free trades a year and then lowers its regular price of $9.95 per trade to $4.95; also, account admin fees are waived.
  • For investors aged 18 to 30, Qtrade Investor offers a flat commission of $7.75, down from the usual $8.75, as well as waiving quarterly admin fees.
  • For clients 25 and younger, Scotia iTrade will waive the $100 annual admin fee on RRSPs and the $100 per year maintenance fees on small non-registered accounts.
  • The Kick Start Investment Program at Virtual Brokers allows an investor to buy (or add to) up to five ETFs each and every month, for no commission. Normally, the cost is $50 a year for this service, unless you’re a student or have graduated within the past two years.

Do-it-yourself investing happens to make great sense for young investors. Investment advisers are notoriously uninterested in young clients for the most part, unless they happen to be the kids of rich clients. Also, the needs of young investors may be too small-scale to justify the fees advisers charge.

Bank mutual funds are an easy way to get started investing, and they’re friendly to rookie investors because they can be bought at no cost. On the negative side, bank mutual funds too often combine lacklustre returns and hefty fees.

The ideal product for young investors? Consider the balanced ETF, with fees as low as 0.2 per cent (mutual fund management expense ratios are typically in the 2-per-cent-plus range).

Balanced ETFs hold underlying funds that produce blends of stocks and bonds suitable for conservative, middle-of-the-road and aggressive investors. A twentysomething could easily choose an aggressive approach, with the understanding that there will be rotten years on the way to good long-term results. Long term, by the way, means 10 years or more.

Story continues below advertisement

The Wealthsimple Trade app is a zero-commission way to buy and sell balanced ETFs, as well as other ETFs and stocks. The lack of commission costs invites frequent stock trading that eventually does more damage than good, but a disciplined investor could use it to stuff money into balanced ETFs on a regular basis.

TD GoalAssist, from Toronto-Dominion Bank, is another app for mobile devices that offers a cost-effective way for young people to invest. Pick one of TD’s own balanced ETFs and contribute money whenever you like with no commissions to pay. GoalAssist also lets you set investing goals and track how you’re progressing.

Robo-advisers are another way for young adults to get help in building diversified ETF portfolios. For a fee starting at roughly 0.5 per cent, a robo-adviser will assess your needs with an online questionnaire and then suggest a diversified grouping of ETFs. Investing is a simple matter of electronically transferring money to your robo-adviser, which then contributes it proportionally to the ETFs in your portfolio.

Robo-advisers typically have lower fees for larger accounts, but a young investor still gets a fair deal.

Stay informed about your money. We have a newsletter from personal finance columnist Rob Carrick. Sign up today.

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Kelowna investment banker fined | Business | pentictonherald.ca – pentictonherald.ca

Published

 on


A Kelowna investment portfolio manager had inadequate compliance systems, record-keeping, and financial reporting, an investigation has found.

Kilburn Ogilvie Waymann Investment Management Ltd. has paid $55,700 to the B.C. Securities Commission in a settlement agreement for not managing business-associated risks and not providing reasonable assurance that it complied with securities legislation.

“Despite the deficiencies, there is no evidence that any clients were harmed,” the BCSC stated in Monday release.

As part of the firm’s settlement agreement with the BCSC, it must retain an independent compliance consultant for two years.

During a 2019 field investigation, BCSC staff found various problems with Kilburn Ogilvie Waymann Investment Management Ltd. These included:

– making unsubstantiated marketing claims

– not maintaining records capable of generating certain account activity reports

– inaccurately calculating its excess working capital

– producing deficient audited financial statements

The company’s chief compliance officer also failed to adequately perform his duties, the BCSC says.

The company’s website shows two employees, Trevor Kilburn, based in Kelowna, and John Waymann, based in Toronto. Between them, they have more than 75 years of combined investing experience, the website says.

Adblock test (Why?)



Source link

Continue Reading

Investment

Doug Ford promises ‘huge’ investment in Windsor, Ont., auto plant after shift cuts – Global News

Published

 on


TECUMSEH, Ont. — Ontario Premier Doug Ford says the province and federal governments will be making a “huge” investment in a Windsor, Ont., auto assembly plant to help ramp up production after the company announced a shift cut.

Stellantis, formerly known as Fiat Chrysler Automobiles, announced last week that it will cut its Windsor Assembly Plant down to one shift next spring in a move that will mean about 1,800 lost jobs.

The company says the move comes as the automotive industry faces significant headwinds including the semiconductor shortage and the effects of COVID-19.

Read more:
Feds fund initiative to develop electric and energy-efficient vehicles with McMaster

The cut from two shifts comes after Stellantis cut the third shift at the minivan plant in 2020 at a loss of about 1,500 jobs.

Ford, speaking near Windsor on Monday, says he wants to see three shifts again at the plant, and he will be speaking with Stellantis leadership on Tuesday.

The premier was not able to offer details on the investment, but said between both levels of government it’s “hundreds of millions” of dollars.

Stellantis has reaffirmed its commitment in a 2020 collective agreement with the local Unifor union to spend upwards of $1.5 billion at the plant.

The Windsor plant produces the Chrysler Pacifica, Chrysler Voyager and Chrysler Grand Caravan.

Ford also spoke of his interest in having a battery facility in Windsor.

“We have all the natural resources, we have the lithium, we have the nickel, we have the cobalt, folks, everything is here,” he said.

“We don’t need to bring these batteries in from overseas. We have everything here. On top of that we have the best workforce anywhere in the world … Any people out there that are listening that want to expand in Ontario, especially the battery business, we’ll be at your front doorstep and we’ll be ready to make a deal with you.”

© 2021 The Canadian Press

Adblock test (Why?)



Source link

Continue Reading

Investment

Boris Johnson Says UK Doesn't Want to Turn Away Chinese Investment – BNN

Published

 on


(Bloomberg) — Prime Minister Boris Johnson said he is not about to “pitchfork away” offers of Chinese investment despite the concerns of some of his own lawmakers. 

Decisions to bar Chinese companies from Britain’s fifth-generation communication networks and nuclear power, and condemnation of China’s human-rights record have soured relations with Beijing over the last few years, but Johnson maintains he is pro-China. 

“I am no Sinophobe — very far from it,” Johnson said in an interview with Bloomberg Editor-in-Chief John Micklethwait on Monday. “I’m not going to tell you that the U.K. government is going to pitchfork away every overture from China.”

Read More: Johnson Hosts Business Leaders’ Dinner Amid U.K. Investment Push

Johnson was speaking ahead of an investment conference in London on Tuesday designed to boost investment into the U.K. and just a fortnight before he hosts the Cop-26 climate summit in Scotland. With Chinese President Xi Jinping likely to be absent from the summit, concerns are growing China may refuse to set new climate change goals and deprive Johnson of a clear win on tackling global warming.

U.K. imports from China amounted to 67.6 billion pounds ($92.8 billion) in the year through June, according to U.K. statistics, a rise of nearly 40% from the previous year. That makes China the U.K.’s third largest trading partner.

“China is a gigantic part of our economic life and will be for a long time — for our lifetimes,” Johnson said. “But that does not mean that we should be naive in the way that we look at our critical national infrastructure.”

The government has said that Chinese firms are welcome to invest in non-strategic parts of the economy but Johnson refused to spell out exactly where he would draw the line. “You’d have to look at what you’re defining as strategic,” he said. 

As part of the investment conference, Huaneng will invest in a 50-megawatt battery project. 

The U.K. has already introduced legislation making it harder for foreign investors to take significant stakes in critical national infrastructure. 

Read More: China Blasts ‘Despicable’ U.K. Move to Ban Envoy From Parliament

Last month, China’s ambassador to London, Zheng Zeguang, was prevented from participating in a meeting in the U.K. Parliament in a case that crystallized the conflicting attitudes among Tory MPs. 

Zheng had been asked to attend by Conservative member Richard Graham, who chairs a group of lawmakers seeking to foster good relations with China. But the invitation drew outrage from others who have been sanctioned by Beijing for speaking out over alleged human rights abuses and the invitation was canceled by Parliamentary Speaker Lindsay Hoyle. 

Beijing has repeatedly denied any mistreatment of its Muslim Uyghur minority and insists crackdowns in Hong Kong are to prevent insurrection. 

Johnson insisted that the relationship can prosper “in spite of all the difficult conversations about the Dalai Lama or Hong Kong or the Uyghurs.”

“Actually trade with China has continued to expand for a very long time and I think probably will continue to expand for the rest of our lives,” he said. 

©2021 Bloomberg L.P.

Adblock test (Why?)



Source link

Continue Reading

Trending