No one likes extra fees, especially when they are hard to understand or being intentionally hidden. You know the ones: the stealthy “service fee,” the suspicious sounding “surcharge,” or the “handling fee,” which is always a head scratcher. There are two fees we think all retirees should know about: investment fees and advisor fees.   

Granted, there’s no avoiding investment and advisor fees. Everyone should be compensated fairly for the service they provide. But how do you determine if a fee is fair? That’s what we developed the Fee Filter for.  

Investment and advisor fees may be difficult for some retirees to understand. Chances are, you won’t find them clearly outlined on your statement. In fact, here at Golden Reserve, we use special software to uncover all the fees hidden within your portfolio. That’s how difficult they can be to find.  

Investment fees can be broken down into upfront costs (like a front-end sales charge deducted directly from your investment) or annual management fees (which are netted off your gains or losses). These fees generally compensate the investment manager of the funds in your portfolio, but sometimes they can be used to pay your advisor too.  

Advisor fees can take many forms, including commissions on the products they sell or an hourly rate for the work they perform. Others operate on a flat fee, which is one set rate for their services. And finally, there is the AUM fee structure, which stands for assets under management. AUM means the advisor is paid a percentage of the funds you invest with them. That means if you’ve invested $400,000 and pay AUM of 1%, your fee is $4,000 annually. But let’s say you double your investment, and now have $800,000 under management. Now, your annual fee is $8,000, even if the services you’re paying for haven’t changed.  

When you’re retired, you’re on a fixed income. However, if you’re paying AUM, your financial advisor is not. Whether they provide services or not, they’ll still get paid. And if your investments rise in value, so will their fee. While it may not seem like a big deal, it all adds up. When you put together what your advisor is paid and what you’re paying in investment fees—2% here, 1.5% there, .5% over there—suddenly those numbers don’t look so small. A $500,000 IRA account could end up costing a retiree hundreds of thousands of dollars over Retirement. That’s precisely why retirees need to see the full picture on the fees they’re paying. Otherwise, over time the constant drip of fees could erode your savings, leaving you with less in the bank than you’d anticipated, and no way to get it back.  

The Fee Filter does a couple things: (1) It lays out the exact cost of every investment you own, (2) breaks down each investment’s performance (so you can see the value associated with the cost), and (3) shows you the additional fees charged by your advisor to sell you those investments.  

The Fee Filter is just one way we address the problem of fees. The other is by practicing what we preach. Here at Golden Reserve, we only offer Retirement-optimized investments. That means low- or no-cost investments with Retirement-appropriate risk. And we never charge a percentage based on the zeroes in your account. We operate on an easy-to-understand flat-fee model. Our mission at Golden Reserve is to help those in or near Retirement reclaim their peace of mind.  

The Fee Filter is part of our Roadmap for Retirement℠, your comprehensive plan for protecting your Retirement. Your personalized Roadmap for Retirement℠ includes the Fee Filter, a Long-Term Care Compass to protect against long-term care costs, a Tax Map to lower your overall tax burden, and a Market Flashlight to right-size your market risk. 

To get your no-charge Roadmap for Retirement℠, click here. 

Greg Aler Founder of Golden Reserve and Author of Fire Your Financial Advisor

Greg Aler was born and raised in small town Ohio. College. Law School. Then off to one of the largest law firms in the world. Later, he went on to build three multi-million-dollar companies before the age of 40 – an elder care law firm, a financial services firm, and a real estate company. He is a perpetual disruptor; re-thinking and re-building industries that are too rich or too stubborn to change. Yet always, coming back to his roots and directing his companies (and his book) to fight for the people that get overlooked – hard-working everyday folks, like his parents. The other 95%-ers.

Greg has his own TV, Radio & Podcast Show—Expedition Retirement.

The only thing Greg loves more than cooking, scuba diving, boating and laughing with friends on his back porch, is being with his wife Fernanda, and three kiddos (Lilly, Lola & Louie).

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