The brain trust for financial planning standards in Canada thinks a 50-50 balanced portfolio of stocks and bonds will make an average 4.7 per cent annually over the long term.
The return estimates come from the 2023 Projection Assumption Guidelines published by the FP Canada Standards Council and the Institut québécois de planification financière. These guidelines are meant to provide prudent numbers for financial planners to use in their work for clients. The numbers are meant to reflect long-term results, not what you should expect for this year or next.-Canadian stocks: 6.
This brings us to fees. The 1.3 per cent fee used in the financial planning guidelines reflects what an investment adviser or planner would charge plus the cost of owning low-cost exchange-traded funds. All-in fees for advisers using mutual funds would be higher - maybe 2 per cent or more in some cases.
The best approach to lowering fees is to examine all your costs, see if they provide value and then, where appropriate, look for cheaper alternatives. For example, mutual fund investors should compare their results with those of low-fee ETFs. This is easy to do - just look at the online product profiles that all mutual fund and ETF companies offer.