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Myths About Investment Fees That Everyone Should Know

Myths About Investment Fees That Everyone Should Know

April 06, 2021

When it comes to the cost of investing, there are a lot of myths and misconceptions about investment fees. We’re here to clear things up a bit so that you can find the right approach for your investments. If you would like us to do a free assessment of your investment portfolio, contact us today. We can determine if your portfolio is too risky for your age or comfort level, or if you’re missing out on potential growth.

Most-Heard Myths About Investment Fees

  1. A prospectus discloses all the fees you’ll pay. The prospectus only tells you what is required to be disclosed. There are hidden costs like kickbacks from selling certain products and fees based on the stocks that are bought and sold that the company doesn’t need to tell you about. (Awful, we know.)
  2. A company offering “no fees” is the least expensive way to invest. More than likely, an investment company that states “no fees” is not being truthful. Those hidden fees mentioned earlier come into play, or other sleazy tricks that can’t be seen or quantified. They use the “no fees” claim to entice you and then lack transparency about total charges.
  3. Calculating the costs of my investment portfolio is easy. A high turnover ratio means that there are a lot of stocks being bought and sold within your account. Those transactions often incur charges and the more often it happens, the harder it is to track.
  4. Look for the company with the lowest fees. It’s what the company or advisor does for you that makes the biggest difference. Look for someone who actively rebalances your portfolio, sits down with you annually, is available to take any questions without nickel-and-diming you, and provides ongoing client education so that you can understand everything that’s happening with your money.
  5. Investment apps are trying to democratize investing. These companies pretend to be on a mission to empower the middle or lower class, however they are in fact doing the opposite. They offer kickbacks for referrals to play with your psychology. If you “earn” $500 for recruiting a friend, that makes you feel good. But consider this: how much money will the app be making from you both in the long run?
  6. Investment fees are tax deductible, so it doesn’t really matter how high they are. First of all, they are no longer tax deductible and your financial advisor should be aware of that change. Second, any fees are taken from your earning potential, so every dollar counts.
  7. Financial Advisors are only available to the rich. You can find the right financial coach regardless of your status. Ask your friends and family and do your own research, then schedule an interview with a short list of experts who interest you. See who is a good fit for your needs.
  8. Fees are non-negotiable.At CSP Financial Group, your fee can be reduced based on the amount of money you have under management with us. If you’re with someone else, it can’t hurt to ask for a lower rate. (The worst they could say is no.)

We’re determined to set the record straight when it comes to investing. You deserve to know how your hard-earned money is being invested and our financial coaches help you every step of the way. We’re not afraid of transparency. In fact, we love it. Join our Facebook Group, Create a Life You Love - Financial Literacy for Adults, and get to know us better.

The American Dream Experience is a compelling encounter with clear, life-altering truths about economics and investing – engaging you in a profound exploration of your family’s financial future. Visit the American Dream Experience page to register to attend.