Tara Unverzagt June 30, 2016 No Comments

Transparency

Transparency is all the rage these days. People want complete information, no secrets held back. This is true in the finance industry as much as anywhere. The SEC is requiring the finance industry to be more transparent, such as recent changes to advisors who help manage your retirement plans. In the past, it wasn’t unusual for advisors/brokers to find creative ways to get paid without you knowing. ETFs are thought of as low cost, but know that some have fees higher than some mutual funds.

Originally there were upfront fees on mutual funds. Once people started saying “Hey, how come I’m paying so much just to give you money?” The front end fees started going down.

Then the “maintenance” fees paid every year were used to pay the money managers. You can now find out where the manager of your retirement account, mutual funds, or ETFs are getting paid. Beware “free” investments. Know that the advisor is getting paid somehow. No one, especially in the finance business, works for free. Often the more “free” someone is, the more they are actually getting paid, somewhere.

Do your homework. Ask your advisor all the ways they get paid: fees, commissions, incentives, bonuses, etc. If you’re investing in a mutual fund or ETF, read the material they provide. Everything now has to be disclosed, but it’s up to you to read it.

If you’d like help reviewing your investments, knowing what to ask or what to look for in a fund’s material, contact me at tara@southbayfinancialpartners.com

 

photo by https://www.flickr.com/photos/fdecomite/

Tara Unverzagt June 22, 2016 No Comments

What About RoboAdvisors?

RoboAdvisors have become popular recently. They provide a way for you to input what your goals are and the RoboAdvisor will come up with a plan just for you (and a million other people just like you). They are popular because they’re pretty easy to get started and their fees are very cheap, far cheaper than personal advisor. And they do a good job for what they do. I had a conversation with my hair stylist yesterday about why you might want a “person” to be your advisor.

In the middle of the conversation, another stylist came over to get advice on what color to use on her client. She said her client wanted highlights, but thought her ends (her last highlight color) were too light, she wanted darker highlights this time. The stylist was confused because the ends were the color that she would have picked for the client also.

My stylist said that perhaps the ends were the right color, but there was too much of that color. He pointed out that sometimes when clients say a color is too light, it’s really just that they want less of that color, not a darker color. My stylist pointed out a way to help the client get more information so she could make the right decision. The other stylist walked away to review the choices with her client.

After the other stylist left, I said “And THAT is why a RoboAdvisor isn’t the best solution for everyone. Sometimes, a client misunderstands what the issues are. A robot can’t have that discussion with you.”

If you found this article helpful, please share on twitter, facebook, linked in, or google+ by clicking the “share” button at the top of the article.