BY: Lars Forsberg
Longboat Retirement Solutions LLC
Ever wonder why your financial advisor sold a fund or bought a particular stock?
Have you ever looked at your portfolio statement from your advisor and scratched your head, thinking what the…?
I met with someone the other day who received his monthly statement in the mail. Glancing at the statement, he noticed something odd; his “fiduciary” investment advisor sold some shares to cover his monthly maintenance fee. Looking further, he noticed that his advisor charged him a fee to sell the shares…..wait for it….wait for it…..that was greater than the monthly maintenance fee.
Therefore, this guy, we’ll call him Joe, was charged a transaction fee, larger than his monthly fee, to sell shares to cover his monthly fee! Awesome. Wow.
So now Joe has lost some value in his portfolio of essentially worthless stock funds, paid a monthly maintenance fee, and paid a transaction fee.
This was a good day for his financial advisor. He collected two fees from his customer.
This allowed his financial advisor to make next month’s payment on his BMW.
Unfortunately for the advisor, Joe decided to break free of the scam and self direct his retirement with Longboat.
Joe’s former advisor will now have to find another sucker to soak for fees to cover October’s car payment.