What you need to know before you attend a “free lunch” seminar!

I am always shocked by how many people go to these seminars. The “free lunch” could be the most expensive lunch of your life.

I strongly encourage you to ask your current advisor or proposed advisor the following: (Even if you have had your Advisor for years!– Trust but Verify!)

1) How do you get paid? List all sources: commissions, 12b-1 fees, management fees, soft dollar incentives.

2) What are the total yearly costs my investments? Management fees, Advisor fees, hidden fees, trading costs, commissions? The lower the better.

3) Will you track my individual performance (net of all fees) vs. an appropriate benchmark like a 60/40 index portfolio?

4) Will you be a fiduciary for me 100% of the time?  The Pledge Most Advisors Won’t Sign!

** Get these items in writing or email. If your Advisor won’t provide them or says you don’t need them, find another Advisor.

I am shocked by how many people don’t or won’t do the above items. As they say in poker, “If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.”

View the detailed Investor Alert:
FINRA Investor Alert – “Free Lunch” Investment Seminars—Avoiding the Heartburn of a Hard Sell

If you have over $500k in a portfolio, email us for a free 2nd Opinion about your portfolio.

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All the best,
Todd Moerman
We are a low-cost, fee-only fiduciary for our clients, no commissions
303-549-4720
Read This Before You Hire a Financial Advisor in The Villages

Here are some tips to help you pick the best financial advisor in The Villages.  If you are considering using a traditional stock broker like Wells Fargo, Merrill Lynch, Morgan Stanley, JP Morgan, Chase, Edward Jones, Ameriprise or your local bank, I encourage you to really take a hard look at the fees and commissions.  If you have over $500k in a portfolio, your total fees and expenses should be under 1%.  I see many portfolios with total fees of 1.5% to 2.5%+ per year.  In my opinion, that is way too much to spend.  Our fees are 0.6% on the first $1 million and decline above $1 million.  We offer a tremendous value to our clients and help build a custom portfolio for your goals and objectives.

1. • Commission-based Advisor – This type of advisor is typically a broker or financial advisor and they sell you products for commissions. These can be stocks or mutual funds with A shares or B shares or C shares.  The investments can also be some sort of insurance product or non-traded REIT.  The commissions can be from 1% to 5.75%+.  Some insurance products and non-traded REITs can be much higher.  This person is held to “suitability standard of care”; to do what is “suitable” for other similar investors.
   • Fee-based Advisor – This type of advisor sometimes works on commission and sometimes charges you a fee. This relationship is very confusing for investors.  This person is held to a “suitability standard of care”: to do what is “suitable” for other similar investors.
   • Fee-only Advisor – This type of advisor works on a fee-only basis 100% of the time. There are no hidden commissions or fees.  This person is held to a “fiduciary standard of care”.  By law, this advisor is obligated to put the client’s interests first at all times and disclose any conflicts of interest.
2. Understand how you pay for financial services. Many investors don’t realize that the cost of investing has dramatically declined over the last 10 years.  If expected future returns from a diversified portfolio are 7% per year and you pay 2% in fees, you pay 28% of your gains each year to Wall Street.  There are 3 primary ways to pay for investing services:
3. Understand what services you need to pay for.  Many investors are not aware of how they pay for financial services.  This has serious implications and can drastically reduce your retirement nest egg.  Do you need portfolio management?  Do you need financial planning?  Do you have solid goals for retirement?  Can you maintain your lifestyle in retirement?  When is the optimal time to take Social Security?  Typically, annuities are not an investment.
4. Get a free 2nd opinion from a fee-only Advisor – You work hard for your money and your family.  65% of retirees who did not prepare adequately for a comfortable retirement did not realize this until they had already retired.  We encourage you to take action and get a free 2nd opinion from a fee-only Advisor who is a fiduciary for you 100% of the time.  We offer free 2nd opinions for portfolios over $500k.  I encourage you to “trust but verify” you have a solid solution in place.  Why You Need a Fee Only Fiduciary Advisor! (video) 
5. Find out if you have significant problems with your strategy or portfolio sooner rather than later.  When it comes to retirement planning, a solid retirement will not happen by chance and there are no quick fixes.  It takes years of planning, preparation and discipline to hit your goals.

If you want to learn more, check out our Why DFA vs. Vanguard page.   Watch some of the DFA videos at the bottom of the page.

• Read this — The Pledge Most Advisors Won’t Sign!

• Watch this video – Can You Maintain Your Lifestyle in Retirement?
• Watch this video – The Most Important Decision of Your Financial Life
• 7 Steps to Get Your Financial House in Order in 2015!

Click here to subscribe to my blog  or email us. 

Give us a call at 303-549-4720

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