Finally full discosure on fees investors pay to dealers and brokers on their investments
It has certainly been a long time coming. Not so long ago I poured over my “statements” from my financial advisor, confused about how they actually get paid and what my actual return on investment was. Now, but the end of 2015 Dealers and Brokers are being forced, albeit kicking and screaming, to finally disclose exactly how much you are being charge for handing over your money, and prepare to be shocked. Client Relationship Model Phase 2, (CRM2) will force the disclosure of critical, and seemingly obvious details of your investments such as money in, money out, annualized returns, and return since inception. It took me literally 10 years to realize my absolutely dismal return only after going back and checking how much I originally invested vs. what is sitting in that account today. Is it right for the brokerage, the bank or insurance company who owns the brokerage to make money, in any market, and you may or not make any money. Should your advisor make more money on your hard earned cash than you do? absolutely not!! Fees erode your returns at an accelerated pace, and any advisor worth his salt will embrace these changes, as hidden fees have kept many in the industry employed when they shouldn’t have been. Similar laws were passed in the UK and Australia where many advisors have since left the business as they are unable to leech off of investors with “embedded commissions”. The bottom line folks, educate yourself and ask yourself is wealth planning about your wealth, or the wealth of your advisor. Consider real estate as an alternative, the arch enemy of the financial industry and earn real, efficient, and solid returns every time.