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 firstname.lastname@example.org
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