For many banks and insurance companies, wealth management means selling products loaded with fees, especially mutual funds. According to ICI, 82% of investors own fund shares through financial professionals such as a broker, investment advisor, or financial planner. Just because you pay your advisor 1% each year, do not think that your mutual funds do not cost you anything.
In a recent AARP survey, a shocking 71% responded that they didn’t pay any fees for their 401(k) mutual fund investments. I didn’t realize that Wall Street had suddenly earned a reputation for working pro bono. Well this simply isn’t the case, and investors need to better educate themselves on the cost of owning mutual funds which can be very reasonable (index funds) to exorbitant (load funds.)
If you are a 401(k) participant, it is very likely that you are invested in a target date fund. Vanguard expects that by 2016, 80% of new participants will invest solely in target date funds up from 64% in 2011.
If you aren’t familiar, target date funds combine several mutual funds into one easy to digest fund and are managed to become more conservative as participants move closer to retirement age.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.-"Runnymede"), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede. Please remember that if you are a Runnymede client, it remains your responsibility to advise Runnymede, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Runnymede's current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: Runnymede does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Runnymede's web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.