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Description:
Is avoiding advisor fees costing you more than the fees ever would?
Most Canadians frame investing as a simple choice: do it yourself with low-cost ETFs, or pay an adviser to manage it for you. But if you have $500,000, $700,000 or more sitting in GICs, high-interest savings accounts or money market funds because you’re not sure what to do next, the fee debate may be distracting you from a much bigger cost. Cash that sits for years while you wait for the perfect moment doesn’t show up as a line item on a statement, but it is never free.
In this episode, Kyle Pearce unpacks why the real question isn’t DIY versus managed investing, but whether your capital is actually working for you. He explains the difference between liking the philosophy of DIY investing and actually executing it, why risk-adjusted return matters more as your pile grows, and how incorporated business owners can figure out where they truly sit on the spectrum between doing it themselves and delegating.
You’ll discover:
- Why leaving large sums in cash or GICs while you avoid a 1% to 2% management fee can quietly create an opportunity cost far greater than the fee itself.
- How risk-adjusted return works in plain language, and why a smoother 8% portfolio you can stick with may beat a volatile 10% portfolio you abandon at the worst time.
- How to place yourself honestly on the DIY-to-managed spectrum, including blended approaches like managing your TFSA and RRSP yourself while delegating corporate retained earnings.
Press play now to find out whether your investable capital is working, sitting or stressing you out, and which investment approach you can actually execute.
Next Steps:
Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
Canadian Wealth Secrets Show Notes Page:
Consider reaching out to Kyle if you’ve been…
- …taking a salary with a goal of stuffing RRSPs;
- …investing inside your corporation without a passive income tax minimization strategy;
- …letting a large sum of liquid assets sit in low interest earning savings accounts;
- …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting corporate passive income taxes at greater than 50%; or,
- …wondering whether your current corporate wealth management strategy is optimal for your specific situation.
For Canadian investors and incorporated business owners weighing DIY investing vs managed investing, the most important question is whether your capital is actually working inside your Canadian wealth plan. Low-cost ETFs and index investing can be a smart early retirement strategy while the pile is small, but leaving large balances in GICs or high-interest savings creates an opportunity cost that can outweigh any advisor fee. As wealth grows, risk-adjusted return, tax-efficient investing and behaviour matter as much as the management fee, which is why corporate wealth planning, personal vs corporate tax planning and corporation investment strategies deserve attention alongside RRSP optimization and optimizing RRSP room. A financial buckets or investment bucket strategy can blend DIY accounts with professionally managed retained earnings, while alternative investments and financial diversification in Canada can reduce reliance on public market volatility. Whether your goal is financial freedom in Canada, financial independence, modest lifestyle wealth or building long-term wealth in Canada, financial vision setting, retirement planning tools and passive income planning help keep capital invested. Thoughtful choices around salary vs dividends in Canada, a capital gains strategy, corporate structure optimization, real estate investing in Canada, real estate vs renting, and estate and legacy planning in Canada turn Canadian tax strategies and financial systems for entrepreneurs into real business owner tax savings and Canadian entrepreneur finance results.
Transcript:
Most Canadians think the investment decision is pretty simple. You either invest on your own and keep your costs low, or you hire an adviser, pay a fee, and have someone manage the money for you. And usually the conversation turns into this debate. DIY investing versus managed investing, low-cost ETFs versus advisers, keeping fees low versus paying for help. But I think that conversation misses the much bigger point. The real question is not should I be DIY or should I be managed? The better question is is my capital actually working for me.
Because if you have $50,000 sitting in cash while you learn the ropes, that’s one thing. But if you have 500,000, 700,000, or maybe over a million dollars sitting in high-interest savings accounts, GICs, money market funds, or low yielding accounts because you’re not sure of what to do next. Then the fee conversation might be distracting you from the bigger issue. You might be so focused on avoiding a management fee that you’re quietly paying an opportunity cost that is much greater. And that is what I want to unpack in this content today with you.
Not to pit DIY investing against managed investing. Not to say that one is good and the other is bad. But to help you figure out where you actually land on the spectrum because most Canadians do not sit perfectly at one end. Most people are somewhere in the middle. And that’s not a problem. It’s just reality.
Now, I understand the appeal of DIY investing. I really do. There is something beautiful about the simplicity of it. You read a book like The Simple Path to Wealth. You understand the idea of low-cost indexed investing. You realize that fees matter. You learn that trying to time the market is usually a losing game. You begin to see that a simple, consistent approach can beat a lot of complicated strategies over long periods of time. And for many people, that’s exactly what they need. Keep it simple. Buy broad, low-cost ETFs, keep contributing, avoid tinkering, ignore the noise, stay invested. That’s a really reasonable path.
But there’s a big difference between liking the philosophy of DIY investing and actually being a DIY investor. And that difference matters because sometimes when I talk to people who tell me they want to be DIY investors, I ask a few simple questions. What brokerage account are you using and they do not have one set up? What ETFs are you planning to buy? And they say just a few. Which ones? They’re not sure. What markets are you trying to capture? Canada, the US, international, emerging markets, specific sectors? They’re not sure.
Then I might ask, if you had to invest the money today, what is the first ETF you would buy? And sometimes the answer is Vanguard, which is really interesting because Vanguard is not an ETF itself. Vanguard is a provider. They have many different ETFs that do many different things. That does not make the person wrong. It doesn’t make them bad. It does not make them, you know, a poor planner or a poor investor. It just tells us something important. They like the idea of DIY investing, but they may not yet have the process, confidence, knowledge, or behavior to actually execute it. And execution is where wealth is actually built. Not in theory, not in the spreadsheets, not in the book summary. Execution.
This is where things get expensive because a lot of successful Canadians are not making reckless investment decisions. They are doing almost the opposite. They’re being cautious. They’re being thoughtful. They are trying not to make a big mistake so that they leave the capital in cash or GICs or money market funds or high-interest savings accounts. And on the surface that feels safe. The money is there. It’s liquid. It’s not bouncing around with the stock market. There is no scary red number on the brokerage screen. But the problem is that safety can become expensive when it turns into paralysis.
If you’re holding a little bit of cash for opportunity, emergency, or near-term needs, that’s prudent. But if most of your investable capital sitting there because you’re not sure how to start, then the real issue is not fees. The real issue is in action. And that is where I think many people get caught. They say, “I do not want to pay 1%, one and a half percent, maybe even 2% for someone to manage their money.” That’s fair. Fees do matter. But then they leave 600, 800, maybe a million dollar sitting underutilized for years because they do not know how to invest it. That is not free. There is a cost to that. It just does not show up in a line item on a statement. And sometimes the hidden costs are the most dangerous ones because they feel painless in the moment.
Now, let me be clear. DIY investing can be a fantastic option, especially when you’re starting with what we call a smaller pile. When the pile is small, mistakes are usually smaller, too. You’re learning. You’re building confidence. You’re figuring out how markets move. You’re learning what it feels like when your account drops. You’re learning how to transfer money, place trades, rebalance, and stick with a plan. That’s valuable. And quite frankly, most wealth managers are not going to manage a very small portfolio anyway. So, if you’re early in the journey, DIY investing can be one of the best ways to learn. Open the account, start simple, buy low-cost ETFs, make the small mistakes, and learn how you react. Build the pile.
Some people do this and they fall in love with it. They love the research. They like understanding markets. They’re disciplined. They don’t panic when markets fall. They actually enjoy managing the system. And for those people, DIY might be a great fit. Not because they are trying to prove anything, but because they have the temperament, the interest, the process, and the discipline to do it well. The key here is honesty. Because DIY investing is not just about low fees. It’s about taking responsibility for the decisions, the process, and the behavior that comes for those low fees.
On the other side, managed investing can also make a lot of sense. And I do not mean that every person needs to hand over every investable dollar. But for many high-income, high-net-worth or incorporated Canadian business owners, the question becomes, is managing my investment portfolio the best use of my time, energy, and attention? Because if you’re building a business, serving clients, leading a team, managing family responsibilities, planning tax strategy, thinking about corporate retained earnings, or trying to protect your long-term wealth, then your attention has value.
And sometimes the cost of doing it yourself is not just the mistakes you make inside the portfolio. It’s the time and energy you pull away from the real money-making activities. That is especially true for successful business owners because simplistic financial planning advice is usually built for the average T4 employee. Spend less than you earn, put money into your RRSP, buy some ETFs, and retire at 65. That might be fine for many Canadians, but incorporated business owners are dealing with a different game. Corporate cash flow, retained earnings, tax drag, passive income rules, corporate versus personal investing, liquidity, risk management, estate and legacy planning. The more complex your financial life becomes, the more important it is to ask whether you need support. Not because you’re incapable, but because your situation may require a more coordinated system.
It’s also important to understand that not all advisers or wealth managers do the same thing. Some advisers charge relatively low fees and put clients into simple diversified ETF portfolios. They may provide some financial planning, general advice, or portfolio rebalancing. For many people, that’s enough. And there’s nothing wrong with that. If you believe in broad market indexing, if you’re comfortable with volatility, and if you believe that market crashes are simply the price of admission for long-term investing, then this type of approach can work very well. It is often very similar to what a well-educated DIY investor might build on their own. The difference is that someone else is helping select the allocation, manage the behavior, rebalance their portfolio, and keep the plan on track.
But there is another type of wealth management as well. One where the goal is not simply to replicate what a disciplined DIY investor could do with a few broad ETFs. The goal is to improve the overall risk adjusted return. That phrase matters, risk-adjusted return. Because as the pile grows, the goal often changes. When you’re starting out, you may be focused almost entirely on growth. You want the pile to get bigger. And that makes sense. But when the pile becomes meaningful, the question often shifts. It’s not just how do I get the highest possible return? It becomes how do I grow this capital while reducing unnecessary volatility, stress, and the chance that I make a bad behavioral decision at exactly the worst possible time. Because a 20% return sounds great, but not if the path to get there causes you panic, selling at the bottom, and sitting in cash for the next 3 years. The return on paper only matters if you can actually stay invested long enough to receive it.
So let’s unpack risk adjusted return in plain language. Imagine two portfolios. Portfolio A earns 10% but swings wildly. One year it’s up 25%, the next year it’s down 20%. Then it’s up again, then it’s down again. Portfolio B earns 8% but with a much smoother ride. Fewer sharp drops, less emotional stress, less temptation to abandon the plan. Which one’s better? The answer is it depends. If you have the stomach, timeline, cash flow, and discipline to ride portfolio A, maybe that’s fine. But if the volatility causes you to make poor decisions and poor choices, then the higher return may not actually be available to you in real life.
That is why risk adjusted return matters. It is not just about what the portfolio earns. It’s about what the portfolio earns relative to the risk, volatility, and emotional pressure required to get there. For many investors, especially as the pile grows, protecting the pile becomes just as important as growing it. Not because you don’t want growth, but you also want to avoid unnecessary damage. You want the portfolio to support your life, not keep you awake at night.
This is also where broader diversification can come into play. A traditional portfolio is built around some mix of equities and bonds. more equities for growth, more bonds for stability, and that can be perfectly reasonable. But some wealth management teams, including the teams we partner with here at Canadian Wealth Secrets, may also look beyond the traditional equity and bond mix. That can include access to alternative investments that are not always available through every traditional advisor, firm, or dealer. The goal is not to chase shiny objects. The goal is to build a portfolio that’s not entirely dependent on public market volatility because public markets move every day. Sometimes for logical reasons, sometimes because of fear, sometimes because of a headline, and sometimes because of short-term noise.
Alternative investments may allow for a portion of the portfolio to be exposed to different return drivers. That does not mean that they’re risk-free. Nothing is. And every investment needs to be understood in the context of your risk capacity, risk tolerance, liquidity needs, time horizon, and overall wealth plan. But for the right investor, broader diversification can be valuable, especially when the goal is not just maximum growth, but steadier, more intentional wealth building.
Now, let’s talk about fees, because this is where many DIY investors get stuck. And again, I understand why fees matter. A fee that is too high for the value being delivered can absolutely drag down your results. But I think most people sometimes look at fees in isolation. They ask, “What’s the advisor charging?” Instead of saying, “What am I receiving after fees, after behavior, after tax, after stress, after opportunity cost?”
Try this. Say out loud a return you would feel comfortable receiving on your portfolio from a managed portfolio advisor. Actually say the number. Maybe you said 7%, maybe 8%, maybe 10%, maybe more. Now ask yourself, would you still feel good about that return if you found out that the management fee charged 1%. What about 1.5%. What about 2%. Now, obviously those numbers can get extreme as we move up the scale, but the point is this. What matters most is whether you’re getting the outcome you actually want. If your net result is strong, your stress is lower, your capital is invested, your portfolio is managed, your behavior is protected, and your wealth plan is moving forward, then the fee has to be evaluated in that context. not ignored, not blindly accepted, but evaluated honestly.
Because if your alternative is sitting in cash for 3 years waiting for the perfect entry point that may never come, then avoiding fees may not have saved you anything. It may have cost you.
This is the part that nobody likes to talk about. Most investment mistakes are not math mistakes. They are behavior mistakes. Waiting too long, selling too early, buying what just went up, changing strategies every six months, holding too much cash because markets feel expensive, convincing yourself you’ll invest after the next correction, then when the correction comes, feeling too afraid to invest.
And this is where a good advisor or wealth management team can add value that is hard to measure, not just in product selection, but in behavior management. Because if a managed approach helps you avoid hitting the sell button at exactly the wrong time, that can be worth a lot. If it helps you deploy capital that has been sitting idle, that can be worth a lot. If it helps you focus on your business instead of refreshing market headlines, that could be worth a lot. And if it helps you reduce anxiety so you can actually stick with the plan, that can be worth a lot, too.
I learned a version of this lesson in real estate. When I started building my real estate portfolio, I wanted to do everything myself. I wanted to manage the properties. I wanted to save the property management fees. I wanted to understand the process. And in the beginning, that made sense. I learned a lot. I made mistakes. Some were small, but some were costly. Over time, something started to shift. The thing I thought was saving me money was actually starting to cost me energy. It was starting to cost me time. It was creating stress and it was making me enjoy the whole real estate investing process less.
Eventually, I put property management in place. And here’s the funny part. I know more about managing rental real estate today than I did during my first years of owning properties, but I still choose to have someone else manage that part. Why? Because they focus on it every day. They have systems. They have experience. They handle the things I don’t want to handle. And I can spend that time and energy on higher value activities. That does not mean property management is always right for everyone, but it was right for me.
And investing can be very similar. Sometimes you do it yourself at the beginning because the pile’s smaller and the learning is valuable. Then as the pile grows and life gets more complex, you realize that delegation is not weakness, it is leverage.
So rather than asking, am I a DIY investor or should I have my portfolio managed, I would rather ask, where am I on the spectrum right now? Because you might be 100% do-it-yourself today, you might be 100% portfolio managed today, or more than likely, you’ll be somewhere in the middle. Maybe you manage your TFSA and your RRSP yourself, but you have a corporate retained earnings account or a larger non-registered portfolio that’s professionally managed. Maybe you keep a portion in simple ETFs and allocate another portion to a managed strategy with broader diversification. Maybe you start with managed support now and learn over time so that you can gradually take more control. Or maybe you start DIYing and realize you don’t enjoy it and move more and more towards an advisor.
None of these are wrong. The key is knowing who you are. Not who you wish you were. Not who the personal finance book assumes you are or should be. Not who the internet tells you to be, but who you actually are.
Because if you truly believe that you can do better than a managed portfolio after fees over a 1, 3, 5, and 10-year period, and you have the process and discipline to prove it, then you may belong closer to the DIY side. But if you’ve been waiting on the sidelines, or if you’ve been saying the market’s too high for the past 3 years, or if you have cash sitting because you’re afraid to make the wrong move, or you don’t know which ETF you’d buy today, if you want to be a DIY investor in theory, but you’re not executing in practice, then you may be closer to the managed side of things, and that’s completely fine.
At the end of the day, the biggest driver of your wealth is not whether you can reduce every fee to zero. It’s whether you have a meaningful capital consistently invested in a strategy that you can actually stick with. Volume of capital matters. Behavior matters. Time in the market matters. Tax efficiency matters. Structure matters.
So before you decide that DIY investing is better because it’s cheaper, ask yourself, is it actually cheaper if I’m not investing? Is it cheaper if I panic and sell? Is it cheaper if I spend hours researching instead of focusing on growing my business? Is it cheaper if I carry stress that could have been avoided?
And before you decide managed investing is better because it’s easier, you should be asking yourself, do I understand the value I’m receiving? Do I understand the fee? Do I understand the strategy? Do I feel more confident and more likely to stay invested and want to continue investing moving forward? Those are the real conversations and questions you need to ask yourself. Not DIY investing versus managed investing, but alignment. Where are you today? What does your capital need today? What does your life need today? And what kind of support helps you make better decisions?
Because the best strategy is not the one that sounds best in theory. It’s the one that you can actually execute.
If this resonates, I’d encourage you to take a look honestly at your own investable capital. Is it working? Is it sitting? Is it structured? Is it stressing you out? And most importantly, are you choosing your investment approach intentionally or are you defaulting into it? That question alone might tell you exactly where you are right now on the investment portfolio spectrum. And of course, you can reach out to us for a free discovery call by clicking on the link in the description.
Just a reminder: this content was created for informational purposes only. You should not construe any such information or other material as legal, tax, investment, accounting, financial, or other advice. Kyle Pearce is a licensed life and accident and sickness insurance adviser. He’s a graduate of the Canadian securities course and is the president of corporate wealth management at Canadian Wealth Secrets. Canadian Wealth Secrets is an education first company whose team members and strategic partners are strategically licensed to assist with asset management, insurance, and private equity opportunities.
