Nothing in life is truly free. When working with a financial advisor, you should expect to pay for their time and expertise. However, as this NPR story explains, you may be paying more in fees to your advisor than you know.
Beyond paying an advisory fee, you are probably paying fees for the investments in which your advisor has you invested. The article points out that paying 1% annually to your advisor and another 1% on your mutual funds can cut your retirement gains almost in half.
So it is important to understand the fees you are paying for investment advice, as well as the fees you are paying for the actual investments.
These AAII articles can help you understand what you are actually paying for your investments:
- Fund Statements: What to Look For
- ETFs and ETNs: Knowing What You Own
- Selecting Active Equity Mutual Funds: Don’t Get Caught in the Middle
If you are not an AAII member but want unlimited access to AAII’s library of educational articles, simply take a risk-free 30-day Trial AAII Membership to start becoming an effective manager of your assets.