Maybe you’re fed up with your financial adviser. Maybe you want to try managing your own investments. How much time and effort does it take to be a do-it-yourself investor?

My current Money 911 series is about flying solo. I think the time is right for many investors to ditch their high-priced help and take over the work themselves.

It’s not so hard. Believe me, I have a self-directed account and I don’t look at it every day — or even every week if I get really busy. It takes less time and effort than you probably imagine to pick a diversified group of investments and adjust them periodically.

You need to find your own trustworthy sources of advice about investing. I’d welcome suggestions from DIY investors about the tools you find indispensible to managing your money without outside help.

Who do you trust? What books, magazines, TV shows, websites or blogs do you consult on a regular basis? Does your discount brokerage have good online resources?

I’ve received lots of comments about my ongoing series and I’m posting some below.

CTV’s program, W-Five, recently told the story of a dairy farmer in Nova Scotia who inherited $155,000 and put it all with RBC Dominion Securities. Within a year, the account was worth only $134,000. Another 10 months later, it was down to just $1,800.

The broker was churning the account — making 126 trades in a 20-month period alone — to earn commissions. He’s since left the industry. His boss was fined $70,000 for failing to supervise his employee. And the dairy farmer collected an amount (which he’s not allowed to disclose) from RBC as compensation for his losses.

I’ve told such stories myself and given space to readers (see first comment, Leveraging Misery), so I’m glad Paula Todd highlighted abuses on W-Five. I’d love to see stronger regulation of stockbrokers, mutual fund sellers and commision-based financial planners, but I’m not confident anything will change.

Here’s the problem: No one listens to ordinary investors. Canada’s securities regulators set up task forces to study what should be done for investors. But do they include investors on these task forces? Almost never. The most recent example of exclusion is the Purdy Crawford-led committee working to restructure asset-backed commercial paper.

The Ontario Securities Commission decided to break the tradition. In 2005, it announced the formation of an investor advisory committee to give direct input on important issues. I was one of 10 people selected for a two-year term.

Our term ended last December and we agreed not to talk publicly about what went on behind closed doors. So I’ll just say this: We didn’t accomplish much. We were more like a focus group than a policy-making body. We never put out any reports on what we were doing or discussing — though we did try. We were divided about many issues and rarely reached a consensus. Still, it was a useful exercise.

The OSC didn’t announce new committee members after our term ended. Nor did it consult us. So I was surprised to see a story in this month’s Investment Executive about what it planned to do to replace us. Basically nothing. The experiment is over.

Instead of listening to a committee of investors, the OSC and self-regulatory organizations will listen to each other. They will talk about issues that concern investors — and invite a few investors to chat from time to time — and that’s all.

Here’s how OSC vice-chair Larry Ritchnie justifies the decision:

The IAC was “extremely useful” but it had “run its course.” Regulators have decided to try something new and, hopefully, better.

This new approach will represent progress because it brings together the four primary organizations with responsibility for retail investor protection; it will also aim to generate investor input from a broader array of voices than a formal investor committee can produce.

There is no one voice for retail investors. We are all retail investors.

Come on, guys. You’re retail investors second and industry insiders first. You’re the last people I’d expect to understand what happens to the dairy farmer from Nova Scotia who hands over the first substantial sum of money he’s ever had to a commission-hungry snake in a suit.

It seems to me there are many articulate people who can speak for investors. There’s no lack of input. The bigger question is: When will the regulators and SROs start listening to investors? And taking action on what they’re told?

Let’s talk about how this giant home services company treats its customers with disdain. Let’s see if we can turn that into delight.

Direct Energy is keen to sign you up and reluctant to release you from its ever-present contracts, which are automatically renewed for another year if you don’t remember to opt out.

Take Murray Wagman, who has subscribed to their furnace protection plan for years. When he came home from vacation in January to a freezing house, Direct Energy couldn’t send a technician until the following day. It guarantees service within 24 hours. Does that mean service at the end of 24 hours? Apparently so, in his case (details below).

Or take Philip Davson, whose son had a nasty experience with a Direct Energy sales agent at the door. The 20-year-old university student, home for a holiday, was bullied into showing the household’s gas and electricity bills and signing contracts. He didn’t know the agent was working for Universal Energy at the same time and surreptitiously slipping him duplicate contracts to sign (see below).

Communicating with the company is a nightmare, people tell me. They can’t get through to anyone in authority. They can’t get their calls returned or their emails answered. Even when they’re promised a correction to their bills, the overcharging continues for months on end.

What makes things even worse is that Direct Energy doesn’t bill customers directly for most services. It relies on the utilities to do the dirty work and take the blame. I can’t tell you how many readers complain about Enbridge Gas, for example, when the fault belongs to Direct Energy. Customers spend a lot of their precious energy going after the wrong target.

This company needs to pull up its socks and show it cares. I want to see real concern for customers, not just a flurry of action when the media get involved. Let’s use this platform to show Direct Energy what it’s doing wrong and how it can improve.

At 11 a.m. today, I heard from a reader, Osama Survery, asking if I knew of this folly at Aeroplan.

Sorry

Our web site is down for routine maintenance and will be unavailable
for a few hours. Please accept our apologies for any inconvenience this
may cause you. Be sure to come back later and try again.

Thank you for your patience.

Who does routine maintenance in the middle of a busy weekday? Didn’t ring true.

Aeroplan’s spokeswoman, JoAnne Hayes, didn’t know anything when I asked. She promised to find out. I hadn’t heard anything by 4 p.m. and asked again.

Sorry Ellen! Thanks for the reminder… This is what I know so far:

During a routine maintenance activity, a significant system outage occurred. At this time, members cannot access their Aeroplan accounts online or through the contact centre, which means no reward redemptions can be made.

We are doing everything we can to restore the system as quickly as possible.

Oh boy. That’s a serious crash, involving phone calls as well as web hits. I checked again with Osama Survery.

I have been trying for a couple of days. Should have never asked for that credit. Good to know it’s not just me.

It’s not the first time I’ve heard of problems getting through to Aeroplan. I’d hate to be trying to cash in my points for a flight and facing a deadline to do it. How do companies get themselves into such messes?

Will Ashworth, a fellow blogger, wrote to me about the new ING mutual fund campaign. He thinks it’s misleading not to compare similar products.

I covered Streetwise on my blog . The one thing that isn’t discussed is the comparison ING uses in their marketing to highlight the benefits of Streetwise over other products.

They compare its 1% MER to 2.6% for the average balanced fund. That is traditional financial services marketing at its worst. They are comparing apples to oranges, passive to active. It’s completely misleading. I believe the product is a reasonable one. I just wish they would play fair in their marketing.

I found this an interesting argument, so I asked ING Direct for its comments. Here’s what I heard back from ING’s Paul McKenna.

Mr. Ashworth is entitled to his viewpoint. However, the Streetwise Funds are stand-alone balanced funds and we have made the direct comparison to the average MER for their peer category. Unless Mr. Ashworth doesn’t consider index funds to be mutual funds, the comparison is valid.

ING DIRECT is an advocate for saving and the intent of the comparison is to highlight how much Canadians pay in mutual fund fees and the impact the additional fees can have on the long-term growth of a investor’s portfolio. The Streetwise Funds provide investors with a low cost option with global diversification across stocks and bonds.

Within the index category we acknowledge that there are lower cost alternatives. However, depending on the distributor, they require the investor to be more involved in managing the portfolio than the Streetwise Funds do. One of these alternatives is a portfolio of ETFs that Mr. Ashworth proposes. Although the example that Mr. Ashworth uses on his website is accurate, he makes some assumptions that skew the analysis towards ETFs:

Mr. Ashworth assumes all investors pay $9.95 per trade to buy and sell the ETFs. This commission rate is one of the lowest available and is generally reserved for the most active traders or preferred clients with high balances. The everyday investor pays roughly $27 per transaction, based on the average of the posted commissions at the major discount brokerage firms (source: Investor Economics: The Retail Brokerage Report - Winter 2008).

He also assumes that the ETFs are bought and held for the five-year period without rebalancing (four Buys and four Sells only). The Streetwise Funds are rebalanced back to their original allocations on a quarterly basis. Even rebalancing the ETF portfolio once a year changes the cost structure significantly.

The final assumption is that the investor does not make any subsequent purchases or uses a dollar cost averaging strategy through regular monthly investments like an Automatic Savings Program offered by ING DIRECT, but a feature not available on brokerage accounts. Commissions would apply to each buy and sell of the ETFs.

The example also does not account for any account administration fees associated with RRSP accounts, which can add another $100 per year to the costs.

The low MERs of ETFs can be quite attractive for investors. However, most investors overlook the transaction costs and once you factor in commissions, rebalancing and other account related fees, ETFs can easily be a more costly alternative than the Streetwise Funds.

This response made Will Ashworth angry. He still wants ING to compare its new product to others that use the same investment strategy.

The real problem is that ING is using 2.6% as the benchmark MER for balanced funds in Canada. We should not be patting them on the back for this obviously manipulative manouevre.

Listen, if you came to me on the street and offered to sell me an iPod for 60% off the going price, I’d be crazy to turn you down. I don’t see how ING’s offer is any less enticing. However, in the case of Streetwise, you’re not actually getting 60% off.

Then, I asked Bylo Selhi to provide his views. While he’s an advocate of indexing, he’s also an independent thinker. Here’s what he said.

ING markets to relatively unsophisticated investors. These folks don’t likely have brokerage accounts, don’t know what rebalancing is, why they should do it, how to do it, etc., nor do they have the discipline to do it. Yes, charging 50 bp to rebalance on top of the ~50bp that TD charges on their eFunds seems high, but it’s half as much as what TD charges for the same service. (TD’s managed portfolios charge 1.25% to 1.5% for eFunds class.)

In addition, as Streetwise assets grow, it’s possible that ING will be able to pass some of the economies of scale back to investors by lowering the MERs. Consider that even at a 1% MER, ING needs to attract $1 billion in assets in order to generate $10 million in gross MER revenues. Out of that, they not only have to pay for fund management, client administration, regulatory costs, legal cost, etc., but they also have to pay for their launch marketing campaign. From a business point of view, 1% doesn’t seem that unreasonable, at least to start with.

As for me, I like the fact that a major financial institution is spending big bucks to tell Canadians about high MERs. But once ING gets that point across, I think it should also start advertising the fact that index funds have lower costs than actively managed funds and start comparing its MER with other similar products.

That would be playing straight with people who not only want to save their money, but to understand how they can save their money.

You only buy a house a few times in your life. So you never really get much experience. By the time you’re ready to do it again, the market has shifted and the rules have changed.

The six-year boom market in Canadian real estate is over, according to reports showing that first-quarter sales in 2008 dropped 13 per cent. Of course, none of the economists is predicting a U.S.-style real estate bust. They’re just talking about having a better balance of supply and demand.

I’m going to be teaching a course at the University of Toronto’s school of continuing education, called Buying the Right House at the Right Price, starting in two weeks. I’ll look at how to prepare yourself for one of the most intense and frightening experiences of your life. You’ll be doing battle with real estate agents, mortgage lenders, lawyers, insurers and house sellers, all trying to outsmart you. Meanwhile, you’ll be taking on probably the biggest debt you’ve ever had, stretching many years into the future.

Even if sales are slowing from the above-average pace of the past few years, I don’t expect to see a buyer’s market any time soon. But it may be a little harder for realtors to stage the big auctions, where houses get 15 bids and go for $100,000 over the listing price.

So, tell me your best and worst real estate experiences. What did you learn about protecting yourself in a rough and tumble world where everyone you deal with has more experience and knows the tricks that you haven’t yet mastered?

Here’s a lesson I discovered. Don’t pick a real estate agent because you meet her at an open house and you think she seems nice. Our agent did all the work in finding us a home, but her partner (whom we didn’t even know about) swooped in at the end to negotiate a deal. She was a barracuda, a nasty person we’d never want to see again, let alone recommend to others. Always ask the agent you know and like about the other people on the team.

It took me more than a year, but I reached a milestone. This post, my 100th, had better be good.

So, let me tell you 10 things I love about blogging:

1) There’s so much room to run things. As a newspaper columnist, I’m limited to 600 words, but here I can write at whatever length I want to. Even better, I can let the readers’ responses go on and on and on. Sometimes, you really need to hear all the details, every last one, not just an edited version.

2) I have a steady group of readers who show up regularly and speak their minds. Thanks, guys.

3) I’m part of a community of personal finance bloggers, some of whom have been doing this much longer than I have. Together, we’re helping to take the subjects of money and investing and debt (and consumer issues, in my case) out of the control of people with vested interests who have a point of view to expound. We’re opening the discussion to everyone.

4) I like the fact that people stumble upon this blog by accident, often while looking up something on Google. Tonight, I heard from Mandy, whose heart is broken because her best friend used her PIN to take money out of her bank account. She left six comments in a row, but I cut them down to three.

5) I love it when I write something late at night and wake up in the morning to find several comments there already. That’s what happened when I did this post on the financial lessons you didn’t learn when you were young.

6) Some posts, like the one on fitness clubs, take on a life of their own. People read these stories and get the urge to try doing something on their own. They cheer each other on and take confidence from each other’s successes. They learn how to be persistent and how to contact the right executive-level staff (along with names, email addresses and phone numbers).

7) When I ask a company to help someone, it helps when I can say the person has posted a comment on my blog. The grievance is out there in public for all to see, putting more pressure on the company to rectify it (as long as it’s legitimate).

8.) This is a place for employees to share what it’s like to work at the companies covered in the blog. You can see their experiences (and vitriol) in this post about energy sellers going door to door with deceptive sales pitches.

9) I like the way you can explore a subject in depth and show many sides to the argument. There are never just two sides. There are dozens. The arguments can get quite heated — incendiary, in fact — as you can see in this discussion of the ethics of using Indian call centres by a major bank. Traffic at the blog peaked in January while the debate was raging.

10) Companies may not like what their customers say here, but they can’t ignore it. Dare I say Bell? With almost 500 comments — and still going — Bell Blues continues to be the most active forum. I predict this will drop off soon and another customer-service slouch will take its place. Any guesses who this will be?

in my Saturday column, I talked about how winning an online auction at eBay can be bittersweet. What you save on the item’s purchase price can be offset — and more — by high shipping costs.

Using PayPal to cover your online purchase, as most eBay sellers prefer, means you’ll be zinged with a currency conversion charge. Forget the Canadian dollar being at par with the U.S. dollar. Either PayPal will hit you with a 2.5 per cent fee at the time of purchase or your credit card linked to PayPal will hit with you with a similar fee later.

That’s how a 1,000-page cookbook, which I won for $11 (U.S.) on eBay, ended up costing me $50 in Canadian dollars by the time it arrived at my door.

My readers had lots of advice about how to buy online and avoid excessive charges for getting merchandise to your home. Some complained about the brokerage fees that couriers impose (luckily, I avoided that trap). And some said they had given up on eBay and electronic commerce altogether.

Canada’s housing boom continues to roll along. We’ve avoided the U.S. real estate bust so far. But how long can prices keep growing?

Mortgages with longer payback periods (30, 35 and 40 years) are very popular with buyers. They bring down your monthly payments and let you get into the real estate market sooner or afford a bigger, better house. Now it’s clear that the extended mortgage has extended Canada’s housing boom.

Check out this report today by the TD Bank, Canada’s Red Hot Real Estate Markets to Cool. Here’s the key part:

The rate of increase in prices has exceeded the growth in household income, with the result that national housing affordability has deteriorated significantly.

The weakening in affordability is not consistent with a continuation of the price and sales growth that was experienced in 2007.

Why didn’t real estate conditions cool sooner? in our opinion, some of the new financing arrangements may have delayed the impact.

If there’s a real estate slowdown coming soon, how will it affect those with 40-year mortgages? They’re building equity at a glacial pace — and since many start with only 5 per cent down or nothing down, they could easily end up owing more than their homes are worth.

When I expressed concerns about long-payback mortgages yesterday, my column had the highest readership of anything published at TheStar.com. And, of course, many readers had their own views of this trend to lending liberalism.

How did up to 2,000 Canadian investors get caught holding asset-backed commercial paper? Would they ever touch such a product unless a financial adviser recommended it — or at least introduced it to them as an option?

This is one of a long list of financial innovations that have exploded in investors’ faces. I was amazed to see how many people held principal-protected notes linked to risky hedge funds, which became clear after the collapse of Portus and Norshield.

As with ABCP, these products were exempt from prospectus disclosure. So even if you wanted to know more, you’d have trouble finding out anything, other than what your adviser said.

I’m not against using financial advisers. I have a long fruitful relationship with my stockbroker, who listens and never pushes me into anything. But then, I know her business almost as well (and sometimes better) than she does.

I also have a discount brokerage account for my non-RRSP funds. I can see the attractions of doing it yourself, but also the temptations of getting too involved (even addicted).

There’s research showing that people with advisers have a more patient, long-term approach. They don’t move into and out of investments as quickly. They’re more interested in planning for the future. Their results are better.

Still, a significant number of people get burned from following poor advice. When I get their complaints, I can see how they are led astray. Some don’t shop around and deal with a friend (always dangerous). Do they put too much trust in their advisers? Are they blind to the need to protect their own interests?

In my CBC radio commentary last week, I said that a lesson learned from the ABCP mess is not to trust your financial advisers or assume they have done research on their recommendations. They’re salespeople, first and foremost, trying to flog whatever makes them the most money.

That resulted in some interesting reactions, both from advisers and from clients. You can see comments below. Please feel free to add your own.