1.5% of $1M is $15k in fees! 1% of $5m is $50k! This is for 1 year. So they will take $500,000 for 10 years!
Who has the yachts? It’s not the investor.
Here is my dealings with them. They claim their commissions are based upon how well you do. So if I start dealing with fisher with $5m, why should they charge me a fee for this initial $5m? They didn’t make this money for me, I made it. Why don’t they charge a fee on the money they make for you instead of the money I bring them? You make me $50k, charge me 1-1.5% on that $50k.
Let’s talk about what happens if they lose you money which is very possible. Do they forego their fee charge if they lose you 25%? NO!
These call me all the time. My questions to them are:
Can you guarantee me that you will do better at making me money that what I make doing it myself?
Can you guarantee me that you will make me money to at least cover the fee cost charged to me each year?
Of course they answer no to these questions.
I will never ever have somebody manage my money. Most if not all managers cannot match the growth of your money that a simple index fund can provide you. Managed funds will always state their best year or 2 but when you look at say over 10 years or longer, index funds will always be better. And the costs of index funds are drastically lower than managed funds, with or without a financial advisor fee on top of that.
Right now, you can make 5% in a money market with very low fees and very low low risk. Or if you want to make more money, you could have got into funds like Vgt or xlk earlier this year and made close to 20% with very low fees.
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