In a recent Wall Street Journal article , Andrea Fuller recounts her experience of searching for the fees that she is paying for her financial advisor and investments – the advisor is an employee of one of the largest financial advisory companies. What Andrea did not expect is that this hunt would require a steadfastness and rigor similar to that of Indiana Jones searching for the Holy Grail.
The first place that Andrea looked to find her fees was in her monthly statements. No luck. Next, she explored the company website. Again, no dice. She then spoke with various customer service representatives who were unhelpful and opaque. Ultimately, Andrea spoke with an advisor who shared that her total combined fee (advisory fee + fund expenses) was 1.4% of assets under management. This advisor has yet to provide any documents to her that show these fees in writing.
Does a 1.4% fee sound high? It should. With many “financial advisory” firms, the scope of their work is limited to investments or insurance (i.e. the products they sell!). A 2016 white paper from Personal Capital concluded that average fees for these “financial advisory” firms ranged from 1.07% to 1.98%. This then begs the questions: Are the investment and insurance products that these firms sell superior to other options out there? The answer: Absolutely not. Simply put, the employees of these firms are highly paid salespeople that rely on the ignorance of the general public.
How do you know if your advisor is taking advantage of you? Request the he or she agree, in writing, to disclose all conflicts of interest and to always act solely in your best interest. If they can’t agree to this, consider shopping around for a fee-only advisor that can.
Today, as co-founder of wHealth Advisors, I find immense fulfillment in knowing that we use our platform as a force for good. As a firm, we’re founded on the industry’s highest standards for ethics and transparency while also offering pro-bono services to those in need. Financially, we donate a portion of our gross revenue annually to qualified 501(c)3 organizations (which are nominated + voted on by our clients).
Personally, though, I find the greatest satisfaction in helping my clients gain financial peace of mind through prudent money management.
Prudent money management is like a positive feedback loop: when we are no longer burdened by finances, other dimensions of our lives also tend to improve. As we continue to grow we realize that as important as money is, those other dimensions of life are equally (if not more!) important.
As modern philosopher Naval Ravikant reminds us:
“The three big ones in life are wealth, health, and happiness. We pursue them in that order, but their importance is reverse.
A calm mind, a fit body, and a house full of love. These things cannot be bought.”
My life’s mission has been dedicated to helping others use money to close the gap between who they are today and the best version of themselves that awaits ahead.
I am excited to meet you and look forward to the opportunity of working together on your journey to financial independence!
Designations:
- Certified Financial Planner™
- Chartered Financial Consultant®
- Accredited Investment Fiduciary®
- Certified Student Loan Professional®
Featured in:
- Forbes
- U.S. News & World Report
- Financial Advisor Magazine
Outside of wHealth Advisors:
- Educating myself more on: Stoicism, permaculture, climate justice, systemic racism, health & longevity science
- Happiest when: outdoors with wife, Arabelle, and son, Manny
- Stays active with: strength training, functional range conditioning, hiking, cycling, surfing, and yoga
- Financially splurges on: Single-origin coffee
