Are you paying commissions or unnecessary fees for investment management?
Can you imagine buying a new suit at Nordstrom without knowing how much it costs? Or filling up your car with gas and the pump doesn’t have a price?
It sounds pretty ridiculous. Unfortunately, you might not have a clue what you’re paying for your investments. In fact, 71% of 401(k) plan participants think there are no fees, while 92% admit they don’t know what the fees are. It doesn’t help that the actual fees you’re paying might be buried deep within the fine print of the investment company’s literature.
Some of the fees you may be paying include:
- Front-load sales charges on purchases of mutual funds
- Ongoing fees for mutual funds that don’t beat their benchmarks
- Excessive transaction fees for trading
- Hidden fees for buying or selling bonds
- Additional fees for proprietary funds
- High commissions on private investment deals
Eric and Mandy were working with an advisor who was a friend of theirs in college. They never got a bill and assumed they didn’t pay anything for his services – a great deal! They felt too embarrassed to question his practices, but decided to go through a Financial Life Inspection™ to have a second set of eyes take a look at their plan and investment mix. A statement review showed that they were paying their advisor 1.5% annually and also were in a mix of high commission products and mutual funds that had expense ratios of 1.5%, effectively paying over 3% per year. They had an uncomfortable discussion when they had to tell him they were transferring their money away, but they know they are being taken much better care of now.
Back to the original question: Are you paying commissions or unnecessary fees for investment management?
If you can’t answer this question confidently, then we should talk. You deserve to work with people who are open and transparent about the cost of their services. Through your Financial Life Inspection®, Pacific Capital shows you exactly what you are currently paying for investment management and ways to save you money.