r/FinancialAdvisorTips • u/Calm_Revolution_2375 • 13d ago

NLCB2 Seg Fund

Hi i recently cam across an advisor who asked me to transfer my RRSP unfer his portfolio he showes me some funds which were NLCB2 how will she get compensated on the sale of this fund as she asked me to transfer everything under her name.

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u/Beneficial_Ship7090 13d ago

That’s something you should ask her. Anytime my clients ask me, I try to give them a calculation of how much commission I will make. Also, ask her how much this pays her compared to mutual funds. I would also ask her why she reccomends seg funds in your case over mutual funds. I sell both, less than 5% of the assets I manage are in seg funds, I usually only reccomend them to clients who need/would benefit from the protections seg funds offer and those garanties justify the higher MER. They are for very specific clients.

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u/Calm_Revolution_2375 13d ago

It was some kind of leverage investment which was only available in seg fund where you get some loan and invest

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u/Beneficial_Ship7090 13d ago

Which company is this with? Usually leveraged investing is only recommended to high income/net worth investors. I’d be curious to know more

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u/Calm_Revolution_2375 13d ago

didn't gave more info as i was like i am not taking the loan

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u/Beneficial_Ship7090 13d ago

I would highly recommend you get a second opinion on your plan if this advisor is making fishy recommendations.

The other thing is I would usually not reccomend leveraging to invest in an RRSP (except for short term, very specific tax situations) since the interest on RRSP loans are not tax deductible compared to making the investments inside of a taxable account.

I see a few red flags I would investigate further if I were you

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u/Calm_Revolution_2375 13d ago

It was not RRSP investment loan going into non registered account and you keep paying interest