Think Twice Before Hiring That Financial Advisor
Here’s a major slap in the face for every person saving and investing for retirement.
The fiduciary rule for retirement accounts that required brokers to act in your best interests (not theirs) is being rolled back.
This is a travesty.
The rollback will allow brokerages to charge exorbitant hidden fees that most people never know exist. And both the hidden and upfront costs that appear to be insignificant can devour a big part of your money.
How bad is this situation? A high-fee financial advisor is about nine times more expensive than a low-fee advisor.
Nine times! And most of the costs are hidden in the fine print.
That’s 3.5% every year!
If you lose in a bad market or if an advisor’s pick is just wrong, you’ll still get hit with the fees.
You have got to be kidding me!
Do the math: At 3.5% per year, you can lose a big part of your retirement nest egg just to fees.
But the hidden fees are where it really gets outrageous. It’s almost impossible to even find them.
It’s hard enough to save for retirement. After taxes, kids, mortgages and cars, I’m surprised most people can save anything. But to be bled dry by these crazy costs is an outrage.
There’s probably nothing that can be done to get the tighter fiduciary requirements back in place, so you had better know all the costs before you give your retirement account to anyone.
And don’t accept the usual “it’s the industry standard” excuse either. If the most expensive option is nine times more than the least expensive, believe me, there is no standard.
As Benjamin Franklin said, “Watch the pennies and the dollars will take care of themselves.”
It’s getting crazier out there.