Financial Advisors: Beware of Fees and Hidden Commissions
Fees and expenses can be deadly for retirement accumulation success
If you are someone who is trying to protect your retirement savings, keeping track of this volatile market is not fun. To assist and help, you may have selected a financial advisor.
I have always found it very odd that the choice of a type of financial advisor could have nothing to do with what they want their financial professional to do for their money. When I ask my clients what kind of financial professionals you want, I get all sorts of answers. Some say, “I want someone with a degree in finance, or I want someone with lots of experience.” A typical response is, “I want a professional who will pick up the phone when the market is crashing.”
Ask yourself: “ Is there anything about my financial professional or what he or she is recommending that guarantees my money will not participate in market losses?” Then ask yourself what I want my financial professional to do with my money. When I ask that question, I usually get one answer: “I want it to grow, and I want it to be safe.“
The answer is important because fees associated with any financial planner can diminish your account. A warning sign is a planner is not in step with your goals by showing safety and security as an option.
Burton Malkiel, a Princeton University Professor of Economics and author of a Random Walk Down Wall Street, wrote the sad truth about three kinds of financial planners.
- Prognosticators: those who don’t know
- Those who don’t know they don’t know
- Those who know they don’t and get paid big bucks to pretend they know.
You should know that your financial professional has no clue what they are doing when they put your money at risk. A risky plan is a guess, only their best guess. It’s a gamble. Regardless of what happens to your future growth and the value of your account, one thing is for sure, your planner will (and is) making commissions.
Most brokers are paid in two ways, some with both of these methods. A broker (financial planner) can charge a fee for their work, much like an attorney. A broker (or planner) can also earn commissions based on the product they recommended in the financial plan.
That is correct; your broker can be paid monthly even if you lose money. The financial professional you trust for your financial future can earn funds on both ends of your relationship, fees for the plan, and commissions for his recommendations.
I don’t charge fees ever. I get paid a finder’s cost for finding clients from the A-rated companies, but the price is never subtracted from a client’s account; it is from insurance company marketing funds. Consequently, I am not very popular with most financial professionals because they have no problem charging the fees.
This is your retirement money, not mine or anybody else’s. The appeal of safe money never being at risk is very desirable. In other words, my secure money information will give you the information you need to decide for or against opening a guaranteed safe money account or continue being faced with ongoing fees and risk exposure.
It’s entirely up to you.