Saturday, December 23, 2017

Being Smart with $$ -- Thank Yourself for the Gift from Your Financial Advisor


Everybody loves getting gifts!  That’s why your financial advisor may send you expensive cigars or wine for the holidays.  If so, I hope you send him/her a note of thanks.  Or wait, maybe you should send the note to yourself.  Your fees are paying for the gift.  Is your advisor charging 1% of assets every year?  If yes, on a $300,000 retirement account these charges may be adding up to as much as $50,000 in fees plus lost investment earnings on those fees over only 10 years!  On a million-dollar account it’s likely over $150,000!  No wonder they are sending you expensive gifts.  They should be sending you a new 60-inch TV or even a car!  And then the question is, are you getting $50,000 of service on a simple $300,000 starting portfolio?  Perhaps an hourly, fee-based advisor can give you equal or superior help but without the huge, recurring annual fees. Let’s discuss the difference.

- Larry Pike, CFA, Client Priority Financial Advisors LLC

- www.clientpriority.com 
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2 comments:

  1. Steve C.April 20, 2018 at 5:27 AM

    I never thought of presents from my financial advisor this way. I'm starting my small business with the help Daniela Bucatele's recommendations, so I'm reshaping my savings and expenses, which just got me thinking how much my advisor has from my portfolio.

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    Replies
    1. Larry Pike, CFAApril 20, 2018 at 10:03 AM

      I believe many advisors take unreasonable fees relative to the service they provide. A simple 1% per year turns out to be a huge part of your portfolio over a decade (or more). Hourly advisors do the same work but don't take high fees every year, even in years you may not speak to them. Thanks for the comment. - LP

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