| I am betting that you wouldn't get your car repaired or buy some new clothes without knowing the actual costs.
And yet 21% of investors are in the dark and aren't sure if they actually pay investment-related fees to a financial advisor. That's according to a recent survey by the Financial Industry Regulatory Authority Investor Education Foundation.
Meanwhile, another industry survey found that nearly 73% of investors (who did pay) didn't know exactly how much they are charged in investing-related fees. Sadly, 64% of investors in that survey admitted they don't even know how to check which fees they're being charged.
Finally, 31% know they're being charged fees, but don't know what they're for or what they are.
It's overwhelming that investors don't know how much they're forking over in fees, or even how to find out which fees they're being charged. Needless to say, knowing how much a financial advisor charges for their services is crucial.
If you're working with a financial advisor, you can be sure they're getting paid for the advice they provide, and how they're getting paid determines how much that financial advisor costs. Every investor should know how much their financial advisor costs. Otherwise, how can you evaluate whether the service is worth the money?
So, what is a standard advisory fee? The average fee for a financial advisor generally comes in at about 1% of the assets they are managing. The more money you have invested, however, the lower the fee goes.
The bottom line: It's up to you as the client to be proactive and to ask about a financial advisor's fees.
For more advice to help you make smart financial decisions, check out CNBC's Financial Advisor Hub and Personal Finance section. |
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