That is a great question! The role of the adviser is supposed to be as a guide to helping you select the best funds for your desired goals in your portfolio. They are to work with you in selecting funds that are a fit for your goals in risk allowance, growth potential, and fee structures. They are supposed to be experts in identifying well performing funds, trends, and emerging investments.
Many of them are very good, and have clients that are well prepared for retirement. There are many of them that are paid by their brokerage house for the specific funds they want sold, and for the commissions and profits earned for the brokerage. Their focus may not then be so much on your needs as it is theirs, and that's been the industry rub. The high fees hidden in the fund structure has led to an increasing number of investors switching to indexed funds (like Vanguard) or moving away from the brokerage houses and purchasing their leading stock investments themselves, and eliminating the fees and middlemen. Nobody likes to see that the person who is supposed to be making you money is making more off you than you are making.
If you choose to invest in a mutual fund that has an adviser, please be sure to meet with them face to face. Interview them before investing. Ask about how they are paid, what the fees are for the fund, and real life performance on the fund, not projections. Ask how often the stocks within the portfolio are exchanged (anything close to 100% is risky for you - they make money for the brokerage on the exchanges,increasing fundholders' expense). Shop for your mutual fund very wisely, before investing a penny. For all the touted returns, according to a recent DALBAR report, the average equities investor has only realized a 4.4% return (for a 20 year study concluded in 2007), under-performing the S&P by more than 7%, and after inflation, returning only 1.44%. Do your homework, and look carefully before investing, okay? Please do as we do - if the interview leaves you with more questions than answers, if you had a bad feeling about it, or if you felt that the adviser was elusive in their answers, thank them for their time, and move on. Again,like in any business, some are good, some not so much; but it's your future and your money, not theirs, so treat it accordingly. Please feel free to contact me if you have any specific questions, okay? Thank you for asking!
.JPG){kind=avatar}
Many of them are very good, and have clients that are well prepared for retirement. There are many of them that are paid by their brokerage house for the specific funds they want sold, and for the commissions and profits earned for the brokerage. Their focus may not then be so much on your needs as it is theirs, and that's been the industry rub. The high fees hidden in the fund structure has led to an increasing number of investors switching to indexed funds (like Vanguard) or moving away from the brokerage houses and purchasing their leading stock investments themselves, and eliminating the fees and middlemen. Nobody likes to see that the person who is supposed to be making you money is making more off you than you are making.
If you choose to invest in a mutual fund that has an adviser, please be sure to meet with them face to face. Interview them before investing. Ask about how they are paid, what the fees are for the fund, and real life performance on the fund, not projections. Ask how often the stocks within the portfolio are exchanged (anything close to 100% is risky for you - they make money for the brokerage on the exchanges,increasing fundholders' expense). Shop for your mutual fund very wisely, before investing a penny. For all the touted returns, according to a recent DALBAR report, the average equities investor has only realized a 4.4% return (for a 20 year study concluded in 2007), under-performing the S&P by more than 7%, and after inflation, returning only 1.44%. Do your homework, and look carefully before investing, okay? Please do as we do - if the interview leaves you with more questions than answers, if you had a bad feeling about it, or if you felt that the adviser was elusive in their answers, thank them for their time, and move on. Again,like in any business, some are good, some not so much; but it's your future and your money, not theirs, so treat it accordingly. Please feel free to contact me if you have any specific questions, okay? Thank you for asking!