FAQs
Is your advisor really independent? –
Most financial advisors work for a broker dealer and are guided by client suitability. There recommendations may be coming from their sales managers, mutual fund relationships or just selling products to generate a commission. Even advisors that hold themselves out as independent, may in fact work for a broker dealer and be guided by the same rules. If your advisor is truly independent, he will be fee only and required to be a fiduciary on your behalf, meaning that your best interest must come first, not the advisors.
What are my current fees? – In order to properly calculate the current costs of working with your advisor, you must do the following:
Advisor Management Fee + Expense Ratio of Mutual Fund or Separately Managed Account = Total Fee
For Example: If your advisor’s management fee is 1.5% and the expense ratio of your mutual fund is 1.2 %, the total cost of your investments are 2.7%. This will be subtracted from your the total return of your portfolio. So, if your investments have returned 6% for any given year, your net return would be only 3.3%. Over time, this will cost you thousands of dollars and could potentially delay the achievement of your financial goals.
Mutual Funds Investing vs. Index Investing
Am I financially fit?
