Understanding Your Investment Fees is Important
September 7, 2024
Investors are encouraged to understand their investment fees, writes Peter Watson.
It is to your advantage to understand the investment fees you pay.
To some this might be an awkward subject to discuss with your financial advisor. Fees are an important factor and discussing fees is just one part of healthy communication.
There are two objectives. You want your fees to be fair and importantly you want fees to cover all your wealth management needs. That largely depends on your financial circumstances and the type of services you hope to acquire.
Some investors will be attracted to an advisor with low fees. Those that have more complex financial circumstances and want a higher more sophisticated level of financial planning will pay higher fees.
A word of caution: Paying higher fees without getting higher service, in my opinion, is a mistake.
Before your next conversation with your financial advisor, I recommend writing down all your financial objectives. For example, paying down debt, saving for children’s education and preparing for retirement.
Also make a list of all your financial risks. This could include the loss of income as a result sickness, accident, or death.
Do you have a power of attorney for property and another one for health in case you are no longer able to make decisions on your own behalf. Who will make those decisions if you are unable?
Make an assessment if all your financial planning needs are currently being covered by your advisor. If not ask if those additional services could be included in future investment and financial planning conversations.
And finally, financial planning topics are plentiful and, in many cases, detailed so I recommend the advice be documented in a written plan.
Your goal is to get the full financial planning advice you need at a fee that is both fair and understood.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com. ACPI is a full-service investment dealer and a member of the Canadian Investor Protection Fund (“CIPF”) and the Canadian Investment Regulatory Organization (“CIRO”). Investment services are provided through Watson Investments, an approved trade name of ACPI. Only investment-related products and services are offered through ACPI/Watson Investments and covered by the CIPF. Financial planning services are provided through Watson Investments. Watson Investments is an independent company separate and distinct from ACPI.
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