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Field Work

Why I Dropped My Financial Adviser

My financial adviser is smart. She’s ethical. And her special IRS tax certification has come in handy at tax time.

So why did I drop her? Fees.

Every year, her firm extracted 1 percent of my modest retirement account balance. This is less than some advisers charge, but on top of that I pay between 0.8 percent and 1.2 percent in fees to various mutual fund firms for the mostly stock funds she selected for my investments. These aren’t exorbitant fees, either, for actively managed funds. But when you add this up, I was shelling out at least 2 percent of my account every year.

Thanks to fees and my penchant for some international stocks, which were sluggish or declined last year, my retirement portfolio did not grow at all in 2014, despite a booming U.S. stock market that gained nearly 14 percent, based on the Standard & Poor’s 500 index.

I used a simple fee calculator to estimate my savings in fees, and the resulting increase in my investment returns, from letting my adviser go. If I don’t tap my IRA funds until age 70, I would save nearly $40,000. This sum won’t radically improve my retirement. But it’s not chump change either. It would pay for a few really big trips my husband and I hope to take – or a large chunk of a year in a nursing home. …Learn More

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On the Web

Readers’ Picks in 2015

Squared Away readers should know this ritual by now. We consult Google Analytics to determine the articles with the most reader traffic over the past year.

This blog covers everything from student loans to helping low-income people improve their lot. But this year’s Top 10 was dominated by one topic: retirement.

Readers’ favorites are listed in order of their popularity, with links to each individual blog:

  • Navigating Retirement Taxes
  • Medicare Primer: Advantage or Medigap?
  • Why I Dropped My Financial Adviser
  • The Future of Retirement is Now
  • Annuities: Useful but Little Understood
  • Winging it in Retirement?
  • Fewer Need Long-Term Care
  • Misconceptions about Social Security
  • Late Career Job Changes Reduce Stress
  • Mortgage Payoff: Freedom versus the Math

To stay current on our Squared Away blog in 2016, we invite you to join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here.      Learn More