Target-date funds are commonly offered as one-stop investing solutions in 401(k) plans. But be careful of FEES — some funds charge more than 9 times what others charge for the same sevice. Those high fees could delay your retirement by years!
Here’s a shocker: mutual-fund industry does not like the idea of curtailing high and often-hidden sales fees (“loads”) and other arcane fee grabs (“12b-1”).
We always puts our clients’ interest ahead of our own. Our management fee is smaller than brokers’ fees plus their hidden sales fees. Our analysis usually shows our recommendations perform better than the brokers’ fee laiden products.
Ever wonder why financial salespeople push certain products? According to economist Steven Levitt, incentives are the cornerstone of modern life. The broker pushes certain mutual funds because she makes a tidy 5% sales commission if you take her advice. The insurance man loves annuities because he can pocket an astounding 10% commission on each one he sells.
MUST-READ article on the “hidden costs of mutual funds”. Study shows the average annual trading costs (commissions, spreads, market impact and opportunity costs) of mutual funds to be about 1.44% IN ADDITION to the publicly disclosed expense ratio, which averages another 1.3.% per year. That means the average fund costs 2.75% per year!
Beware the “nice” man at church who is trying to sell you financial products with high fees and commissions that benefit him more than you. — Roger Wohlner, CFP®
