Answered straight, including the parts that are not flattering. Product specifics like minimums and rates are set by the lender and move with the market — the approval is what governs.
Common searches
What do I need to qualify for an investment loan?
Two hard numbers govern it. First, net worth: your net worth generally has to be at least twice the loan amount. Second, debt service: your TDSR has to stay under 40% once the interest on the loan you are applying for is counted in — not before. Both exist for the same reason: the loan is repayable regardless of how the investment performs, so approval turns on your ability to keep paying interest through a bad market, not on your expected return. Final terms are set by the lender at approval.
There is no minimum at present. At WWFS we take applications from $10,000 up. The more useful question is the ceiling rather than the floor: how much you can keep servicing through a bad market without changing your life. We size the loan from your affordability, in writing, before anyone talks about an amount.
As of writing the rate is 5.45%, dropping to 5.20% on loans of $100,000 or more. It is a variable rate, so it moves with the Bank of Canada — treat those numbers as current, not fixed. What matters more than the headline rate is the after-tax cost: interest borrowed to earn investment income is generally deductible, so a rate of R costs roughly R × (1 − your marginal tax rate). At a 42% marginal rate, 5.45% costs about 3.16% after tax. Our calculator prices this with your own numbers.
It depends on your situation, and it is not for everyone. For the people it does suit, it is a very powerful tool. What makes the difference is capacity, not appetite: leverage magnifies losses as well as gains, and the loan balance does not fall when the market does, so there will be stretches where the account is worth less than what you owe. Two things keep that survivable — a 100% no-margin-call facility, so a paper loss stays on paper instead of forcing a sale at the bottom, and interest you can keep paying without selling. Our calculator is built to show the loan losing, because seeing the downside priced is what makes a yes meaningful.
Generally yes, where money is borrowed for the purpose of earning investment income and the funds can be traced to that purpose. Two things commonly break it: mixing borrowed money with personal spending, and holding funds that keep paying return of capital, which can grind down the deductible portion of the principal. Confirm the treatment with your accountant for your own situation.
A margin account can issue a margin call and liquidate your holdings when the market falls — the decision is taken out of your hands at the worst possible moment. A no-margin-call investment loan cannot. That single difference is why one structure survives a drawdown and the other often does not.
What happens if the market drops right after I borrow?
An early drawdown is the worst case for a leveraged plan, because the interest bill arrives in full while the capital has shrunk. It is survivable if two things are true: the loan cannot be called, and you can keep paying interest without selling. Both are decided before you borrow, not after.
It is not a shame for us to talk about how we make money, so here it is plainly. We are paid through commission, and the commission itself comes out of a portion of the management fee you pay to the fund. At Wallace Wang Financial Services we normally do not charge a person an individual financial advisor fee, which the bank usually does.
Why is that pay structure good for me?
Because it means we are trying our best to make you money, so that we can make more commission out of it. The commission is based on the market value of all of our clients' portfolios. If your portfolio grows bigger and bigger over the next ten or twenty years — say it doubles in the next ten years — our commission doubles with it. And if you do not like our service and you decide to withdraw the money, maybe transfer it to another institution, we lose all of those management fees. Which means everything we do in this firm is solely for our clients to be better off.
Do you charge a consultation fee?
At this point we do not charge any consultation fees, which means the consultation is free. You just come to us and ask all the questions you want to ask, and I will give you something that is going to be very helpful to you. And if you then decide to move forward and try out some of the products we have, we have all sorts of products to help you achieve your goal.
How much am I going to pay a financial advisor like you?
Someone asked me this exactly, and the answer is: the more we make you, the more you pay us. Our commission is based on the market value of your own portfolio, which means the more money you have, or the better the return we make for you, the more money we make. So there is no specific number. It is not like saying I pay this financial advisor ten thousand dollars a year. It can be ten thousand dollars, and it can be a million dollars — if we make you ten million dollars in profit. Which means ultimately we stand in the same shoes as our clients.
Is the advisor fee charged from my own portfolio?
I am going to be very straight with you: it is a yes. Every fund carries a management fee, including the ETFs you buy yourself on the public market, and it comes out of the fund rather than being billed to you. One distinction worth being precise about: an ETF's fee pays the fund manager, not an advisor — if you buy it yourself in a self-directed account, nobody is being paid on your behalf, and trailing commissions have been banned in Canadian discount-brokerage accounts since 2022. Where an advisor is compensated out of a fund, it is through the dealer compensation built into advisor-sold funds and segregated funds.
Do I have to subtract the fee from the performance numbers I am shown?
No. When you look into the fund sheets we provide you, the historical performance data is the net return of the fund — the number you see has already been netted of the management fee. So if the data says this fund performed fifteen percent a year for the past ten years, you do not calculate fifteen minus two is thirteen. It is fifteen. What you see is what you get. Two caveats worth stating plainly: those returns are net of the fund's MER but not of any separately billed advisor fee, which would come off on top; and past performance is not a prediction of future returns.
Why do so few people know how much they are actually paying?
The reason a lot of people do not see how much they paid is that the management fee is embedded in the fund. The return you see at the end of the year has already had the management fee netted out — it has already been deducted from the fund itself. The cost is completely real, it just never appears as a line on your statement.
What is an advisor fee, and how is it different from the management fee?
There is another form of fee called an advisor fee. This one does show up on your investment statement, and it is on top of the management fee rather than instead of it — if the management fee is two percent and the advisor fee is one percent, three percent is coming out. On tax: an advisor fee is deductible only on a non-registered account. Fees on an RRSP, RRIF or TFSA are not deductible, and the management fee embedded inside a fund is never separately deductible by you in any account, because it is netted inside the fund before you ever see a return. At WWFS we currently do not charge any advisor fee. The consultation is free, and if you decide to move forward with the products we have, the management fee is all of your cost.
If I buy ETFs myself, is the management fee a lot lower?
The answer is yes, and by a wide margin. Broad index ETFs commonly run about 0.05% to 0.25%; sector, thematic and actively managed ETFs are higher, often in the 0.3% to 0.8% range. Either way it is far cheaper than an advised portfolio, and we are not going to pretend otherwise. What it buys you is the investment return and nothing else. A financial advisor's service is not only getting you more return the way your ETF does — we do consultations from the standpoint of taxes, investments, insurance, retirement, even estates. Whether that is worth the difference depends on how much of it you actually need.
So what do clients get for paying the higher fee?
For a lot of our clients, they pay one percent to one point five percent extra on the management fee to use our service regularly. What we see with those clients is a much bigger saving in taxes, and much better long-term growth for their overall portfolio. That is what we observe across our own client base rather than a guarantee, and your own case still has to be worked out on your own numbers.
Will an advisor sell whichever product pays the highest commission?
On this market, I know a lot of advisors who sell for commission. Of course we sell for commission too — but our first priority is the benefit of our clients. If a product is best suited for our client and the commission happens to be the highest, we will still recommend it. And a lot of the time, if a product is good but the commission is really low, we will still choose that product for our clients. However, if we make the decision for our clients solely because the product gives us the better commission yield, I do not think that business model is ever sustainable.
Is the product you recommended the one that pays you the most?
The answer is no — but only in the sense that it is never the commission that decides it. If a product is not suitable for this client, we will not choose it anyway, no matter how high a commission the insurance company or the bank gives us. But if we think the product is suitable for our client and at the same time it gives the best commission to us, that is a win-win situation. So why not.
Is it possible for a WWFS advisor to recommend a product that pays them well but is not good for me?
The very simple answer is no. I can recall quite a few times when I or our sales team reached out to a client, and that client already had a perfect portfolio set up — maybe by himself, maybe by another advisor. All we gave that client was the consultation: you are doing a really good job, there is nothing we can do to really improve it or make it better. And we simply sent that client back to where he originally was. Because there is no point in us recommending our own product if that makes the client's return worse. Ultimately we do not judge on how much commission we make, we judge on the outcome for the client.
Why can that not happen at your firm?
The reason it is not possible in our firm is that I want to do this business for the rest of my life. We have been in this business for seven years. If we kept getting complaints that Wallace recommended a product we did not need and forced us to buy it, how could we sustain the business? If we ever recommended a product that is not suitable for the client just because we make the most out of it, I do not think that business model is ever sustainable.
What kind of relationship are you actually looking for with a client?
At WWFS we truly think we have to maintain a long-term relationship with all of our clients. The ideal picture for us is growing with the client until they finally reach retirement, or until the end of their life, or until the end of our life. We truly believe that a long-term relationship between us and the client is what really matters here.
I already max out my RRSP. Is an investment loan the next step?
Only if the portfolio can compound above the break-even. Borrowed money lands in a non-registered account that pays tax on distributions every year and capital-gains tax on the way out, while the same dollars inside an RRSP compound untaxed. That drag lifts the hurdle above the after-tax interest cost. Run your own numbers before deciding — the calculator does exactly this comparison at equal out-of-pocket cost.
The usual rule — contribute to an RRSP if you are in a high bracket — is only half the picture. What decides it is the gap between your marginal rate today and the rate you expect on withdrawal, including OAS clawback in retirement. A large RRSP can push retirement income into the clawback band and quietly tax itself at a higher effective rate than you contributed at.
An IFA pairs a permanent life insurance policy with a loan secured against it, so the capital used to fund the policy can be redeployed rather than locked away. It is a sophisticated structure with real moving parts — lender terms, policy performance, and CRA's view of the interest deduction all have to line up. It suits a narrow set of situations and should never be entered from a brochure.
Why do people call whole life insurance a financial instrument?
Because a participating whole life policy accumulates cash value that grows tax-sheltered and can be borrowed against, and the death benefit passes outside the estate. That combination gives it uses beyond protection. It is also slow, illiquid in the early years, and expensive if abandoned early — which is why it belongs in a structure, not in a sales pitch.
Sometimes — the fee buys a death benefit guarantee, potential creditor protection, and a named beneficiary that bypasses probate. But in a leveraged plan, fees are the single largest controllable variable: every extra percentage point of MER raises the return you need to break even by a full point. Decide it on the arithmetic for your own case, not on the feature list.
Education and general information only. Not investment, tax or legal advice, and not a promise of any return. Leverage magnifies losses as well as gains, and the loan principal is repayable regardless of how the investment performs. Suitability depends on your full financial picture — discuss it with a licensed advisor before acting.