What Does a Financial Advisor Really Cost You?

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Does your financial adviser charge you 1% “AUM”? Or 1.5% or even 2% Assets Under Management? That means they take a fee of 1-2% of ALL of your money that’s invested in the stock market. Doesn’t sound like a lot, right? Actually, it’s a shit-ton of money over the life of your investments. In the […]

1% Assets Under Management doesn’t sound like much, but it can add up to thousands of dollars!

Does your financial adviser charge you 1% “AUM”? Or 1.5% or even 2% Assets Under Management? That means they take a fee of 1-2% of ALL of your money that’s invested in the stock market.

Doesn’t sound like a lot, right? Actually, it’s a shit-ton of money over the life of your investments. In the video linked below, I’m gonna do just a smidge of the math to show you just how much money you really lose when you pay “just a 1% fee” based on the total of all of the money in your investment accounts.

To be clear–this isn’t 1% of your earnings, it’s 1% of ALL THE MONEY in your accounts– that includes IRAs, 401ks, and brokerage accounts that an adviser is managing for you. Some advisers also charge annual fees on top of that! I didn’t include those in my calculations, so just tack on $1500 or more to the annual total I use here.

This is a totally avoidable, unnecessary expense, because it’s super easy to invest your own money and match the performance of the US stock market with low fee simple index funds.

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