investing

How Much Do Financial Advisors Charge, Really?

July 17th, 2013

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This blog post was originally published on the MoneyGeek.ca blog by Jin Choi. The website no longer exists, but Jin has graciously allowed us to re-publish his research for the benefit of future investors forever.

A few of my friends have financial advisors. When I ask them how much they think the advisor is costing them, I usually get a very confused response.

"Don't they work for free?"

is sometimes what I hear. Others say that they're aware that mutual funds are charging them roughly 2% per year. When I ask them if they think that's too much, they shrug their shoulders. 2% doesn't sound like a lot.

Until, I ask them the following.

"If you have $50,000 in mutual funds, 2% is $1,000 per year. Are you happy to pay that every year?"

That's when some people 'get' it.

To serve these people, we've created a page that calculates the actual fees charged by financial advisors. You can check it out in this link. You can also find the page under the 'About' > 'Advisor Costs' menu.

When you use the tool, keep in mind that even if you don't have a lot of money saved up right now, you eventually (hopefully) will. It's common, for instance, to see boomers with hundreds of thousands of dollars in mutual funds.

If you find the page useful, please share it with your friends. It just might open their eyes.

This blog post was originally published on the MoneyGeek.ca blog by Jin Choi. The website no longer exists, but Jin has graciously allowed us to re-publish his research for the benefit of future investors forever.