Are you paying fees on top of fees?

Would you be willing to give up 40% per year in investment return? While most people would balk at the thought of losing that much money, they may be doing so unknowingly if they’re paying both advisor fees and mutual fund fees. A no-frills investment advisor would likely charge around 1% per year (this figure may be higher or lower depending on the size of your account). But about one percent is often the sticker price they present to prospective clients when making the pitch to manage their money. But if your advisor is using mutual funds, then there are two investment costs that determine the real cost of your advisor: the advisor fee AND mutual fund expenses. Advisors don’t always tell prospective clients about mutual fund expenses, which can add another 1-1.5% percent. This would bring the total cost of investing with that advisor to a whopping 2-2.5%. Mutual fund expenses are embedded in the cost of the fund, so you might not even know about it unless you read each fund’s prospectus and the advisor’s disclosure brochure for any other fees you may pay. It’s always a good idea to ask what the expense ratio (that’s the fee)