Kevin Lynch

Comments:

• Let's do some high-level math - 1% of AUM is an absurd expense with no tie to value created and no rational explanation. Think about it, if my Assets increase by 5% in any given year, taxes eat up roughly 1% those gains, inflation another 2% of those gains, providing me with a 2% return. Guess what, for the grueling labor involved in managing my money, my friendly financial planner takes 50% (or the 1% of 2% return) of my return with no risk, only profit. This single expense may be the single largest impediment to a secure retirement!

  Post: Is a good financial advisor worth 1% of assets per year?

  Link to comment from June 22, 2024

• The article estimates that 20-30% of investment returns are lost via an investment advisor. I think that percentage may be much higher. A 7% investment return is reduced by taxes (assume 1%) and inflation (assume 2%) resulting in a 4% real return. The investment industry has the advisor taking 1% and its typical for them to put clients in their firm's overpriced mutual funds charging at least an additional 1%. The net result is that the advising firm takes ONE-HALF the real returns for putting clients in investments inferior to INDEX FUNDS. One word sums up the financial advising industry - GREEDY.

  Post: Fees Are Your Foe

  Link to comment from November 20, 2021