You may not be slack close enough attention to fee transparency while working with your pecuniary advisor, and it could be costing you big time.
“High fees, compounded beyond a long period of time, can be more than the performance of the actual investment that you take,” said Ron Carson, founder and CEO of the Carson Group.
Mutual funds are an admonition of this, Carson said. You may see the management fee that you’re paying, but not the supplemental compensations that can run as high as 1 percent to 1.5 percent.
You can proactively address this lay of the land in two ways, according to Carson.
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How much those advisor fees are costing you
Leading, demand that your financial advisor disclose all of the fees you are requiting.
Second, you need to look at what you are getting versus what you are being asked, Carson said. With alternative investments, where fees are commonly higher, you should have higher expectations for the returns on your well-to-do.
At the same time, make sure you are not paying too much for passive investment policies.
“If you’re just going to buy the S&P 500 and you’re going to pay a premium to a financial advisor for that and you’re not buy anything else, that’s a red flag,” Carson said.