No matter how well the stock market is doing, or how great of an investment plan you have, the reality is that it’s not what you earn that matters; it’s what you keep. Everything from taxes to the fees charged by advisors are just as important as returns when it comes to growing your wealth.
That’s why investors are often disappointed by hidden fees. Hidden fees can eat away at your bottom line (while increasing the bottom line of your advisor), so it’s a wise move to avoid them before you face a similar disappointment.
What are hidden fees?
Too often, brokers charge hidden fees that are not clearly disclosed to the client. Those fees are there to benefit the broker – not you. Under the suitability standard, many financial advisors (who are legally brokers) are legally entitled to charge these fees, as long as their advice is deemed “suitable” for their clients.
A common example of this is the 12-b1 fee. Frequently attached to 401(k)s, it’s a highly variable fee that can be quite costly.
How can you avoid hidden fees while investing?
One of the simplest and smartest ways to avoid hidden fees while investing is by utilizing a fiduciary advisor. Fiduciary advisors are held to the fiduciary standard, which will ensure your investment portfolio will be free of hidden fees.
The fiduciary standard is the highest legal standard for advisors. Under this standard, any advice you receive is legally required to be in your best interests.
Want to learn more how you can avoid hidden fees while investing?
At LexION Capital, we’re a fiduciary firm, so by design we never charge hidden fees, commissions or markups. If you’d like to learn more about our approach to investing, schedule a conversation with one of our fiduciary advisors today.