How Do Fees Affect Your Investment?
Why Avoid Excessive Fees? Example: John and Richard are twin brothers that start investing for retirement at the age of 30. John invests with an agent from a particular company.
Richard chooses an Independent Financial adviser (Broker).
At the end of 30 years both investments performed at the same rate, but John paid 1% more in fees because his financial adviser was not able to offer him the best fees on the market as was only able to recommend products from one company. Richard will end up with 30% more to retire on because his broker was able to compare all the options on the market and get him the lower fees.
Some companies have very complicated products that will land up overcharging the client. If being charge 1% more in fees can make you land up with 30% to retire on, could you imagine what would happen if you were overcharged by 2% or perhaps even more?
There are many different companies that want you to invest with them and will often insist that they have some kind of “clever product” but can actually land up extorting hefty fees from you in the years to come. There is thus a very important need to consider getting independent financial advice. Your Financial Adviser should also give more priority to a sound investment strategy than some “clever product”. If the investment strategy is not sound, then no matter how a good a product is, it will perform poorly and therefore cost you far more than you should pay.
Solution? Contact a PBA Financial Adviser to get independent advice and avoid hefty fees.
Disclaimer: Please note that the Following information is purely illustrative and educational in nature. This is therefore not financial advice.