Everything You Ever Wanted to Know about Investment Expenses – Infographic

“Every dollar of investment expense is one less dollar you have available for re-investment and your future use.”

Very few financial advisors volunteer complete, accurate information about investment expenses. This is called omission. They get away with omission when you do not require complete transparency for all expenses.

Here’s our Infographic on Everything You Ever Wanted to Know about Investment Expenses.

What is Transparency?

Only high quality, ethical financial advisors practice full transparency when they disclose every penny of expense that is deducted from your accounts. They volunteer this information so you do not have to ask the right questions and know good answers (reasonable expenses) from bad ones (excessive expenses).

Why Withhold Information?

There are three reasons why advisors withhold expense data.

  1.  You may not buy what they are selling if you know all of the expenses that will be deducted from your accounts. For example, really bad investment products charge high fees so they can pay big commissions to less ethical sales representatives.
  1.  Advisors do not want you to know how much money they make from your assets. For example, an advisor may make thousands of dollars for a one-hour sales pitch. You may question the value of their services in relation to their compensation.
  1.  It is tougher to compare competing proposals if you do not know expenses. For example, one advisor proposes services that have a fully loaded cost of 2%. Another advisor proposes services that cost 3.5% of your assets each year. The more expensive advisor has a better chance of winning if you do not know his proposal is 75% higher than his competitor.

Protect Your Financial Interests

Each advisor who wants to influence or control the investment of your assets should be required to do three things. He must:

  1. Disclose all expenses that are deducted from your accounts
  2. Provide written disclosure so you have a permanent record
  3. Describe what you get for the expense

You make the right decisions when you have the facts.

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