I would rather do everything myself. I do not trust advisors and think that I can do a better job than them.

Clearsight’s Vancouver office isn’t glittery. It’s pretty quiet but they probably have less people there because I am guessing Clearsight started in Toronto.

BTW, I should disclose that I got into the NW Speciality Equity before it closed, that’s why I’m happy with it!

I mentioned NorthWest because of its flagship fund - The Speciality Equity which has a proven track record of 20.58% in the last 15 years. Among the top 5 mutual funds in Canada with that length of history, its since been closed to the public. But since you’re looking for a Canadian Equity fund, I admit those boutique mutual fund companies are only so so in that arena.

The reason is that they function much better in their specialized expertise. For example, Chou Associates, great Canadian small cap fund with 14.33% over 15 years.

Guess I’ve already talked too much in these comments. I’ll save it for upcoming posts on my Blog!

Anyways, I think I found out about them that way. I went to Clearsight’s website (their old website which had a bit more information on it) and noticed this “RRSP stock basket” thing they were advertising. I called them up to inquire and the guy on the phone mentioned it was a portfolio managed by Ross Healy. I ended up researching Ross Healy and I really liked the guy. He was value-oriented, has an amazing track-record, and two amazing mutual funds (perhaps I’ll save the detail here for a future post!). I consider his 2 companies to be 2 of those excellent companies who “don’t use the traditional distribution channels” as you say. Anyways apparently Clearsight is the only place where you can get access to Ross Healy’s stock basket (you need $250,000 minimum to go to his company directly). I also liked the fact that they were commission-free (ie. the individual advisors don’t make commissions) and I really like some of the things the advisor I met with said during our first 2 meetings before signing up.

I checked out those fund companies you mentioned and looked at their Canadian equity offerings:

• For Saxon, their Canadian stock mutual fund has managed to match the index exactly over 20 years. Min. investment: $5000.
• For Northwest, their Canadian equity fund has matched the index exactly over 10 years. Min. investment: $500
• For ABC, their Canadian Fundamental-Value fund is in a league of its own getting 18% vs. 10.7% annualized for the index over the last 15 years. Min. investment: $150,000.
• PH&N’s Canadian Index Fund has just edged out the index by a percentage point over the last 10 years.

So nothing really stellar there except for ABC Funds which has a minimum required investment of $150,000. Healy can generate similar returns for a $250,000 minimum. My goal right now is to build up enough money so that I can take my money to ABC Funds or Ross Healy! Either through Clearsight or on my own if I have to.

One often used tactic, that also gave birth to the idea of portfolios, fund of funds because these salespeople cannot be bothered with examining your portfoliio. They don’t make money servicing, the make money selling and receiving new investment capital. The fund-of-funds approach was perfect for advisors because

1. They allow the “advisors” to concentrate on what they do best. Guess what that is?
2. They are an easy sell for consumers (note that I didn’t say investors) because they contain all the “worry-free” catch phrases and features!

There are so many excellent Canadian Mutual Fund companies out there like Saxon, NorthWest, ABC, PH&N.. the list goes on, but one common thing is that they don’t use the traditional distribution channels. That’s not a knock on the companies, they’re saving you money that way! But it means that many advisors will refuse to recommend them simply because they don’t earn comissions or trailers on them.

That was ClearSight’s stance when I asked them, they said that they would arrange up-front negotiated fees and won’t look to manage them on-going. Didn’t impress me at all.

As for financial advisors knowing more, I would argue that. Most of the financial advisors I have met (and there have only been 2), were pure salespeople. I also know people that work at the banks and are qualified to sell mutual funds. Let me tell you, it scares me how much these salespeople know about financials. At least you are going to more of a specialized firm, so hopefully they are better than the banks.

Like Tom Connolly (http://dividendgrowth.ca/pages/old_site/) says “Mutual Funds are sold, not bought.”

Also, read his section on Why I Refuse to be Sold Mutual Funds. I would love to subscribe to his newsletter, but he isn’t taking any new readers at the moment.

I remember another saying I heard. Kevin O’Leary from SqueezePlay on ROBTV once said, “Don’t buy mutual funds. Buy the mutual fund companies!”

You are still young and have lots of time to learn. So go with what is comfortable, keep on blogging and learning, and keep your advisor in check.