By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management Advisor^SM
Accredited Investment Fiduciary®
 

When a new prospective client calls our office, one of the questions they sometimes ask is “What are your fees?” before they tell us what kind of service they are seeking or ask us what we do.  Investment fees are a popular topic lately in news articles and advertisements.   I respect the question and wholly advocate using money wisely:  it’s the entire premise of what we do!

What the questioner cheats himself or herself out of sometimes is asking about fees without a proper apples-to-apples basis for comparison.  That can be difficult to do without fully understanding that there is an entire universe of investments that differ in structure, reasonable expectations and expense from one another, as well as a different level of service and expertise that may be included with the fees that one may pay.

Investments are tools.  You need different tools for different jobs.  You wouldn’t use a screwdriver to drill a hole or superglue to weld metal together.  Likewise, we recommend different investments for different purposes, and each have their associated costs.  To quote fees without knowing the job that needs to be done would be a complete disservice.

Our conversation starts with “What is the most important thing I can help you with?”  Often, we are met with a list.   From there, we ask that you prioritize.   It’s a given that fees are important.  If having the cheapest investments is at the top of the list, we will point you in the right direction.  Questions that we commonly receive include things like, When can I retire?  How do I know which accounts to use and when?  Should I convert to a ROTH?  How do I calculate required distributions?  And many more.

Once I had a consultation with a couple.  The wife handled their investments because she was worried she would pay too much in fees if she worked with an advisor.  She didn’t want to use money from their investments because she was afraid that taking money out would mess things up, but she didn’t quite know how.  This was unfortunate for her husband who wanted to enjoy their hard-earned money now that they were nearing age 70.

I had a conversation with another prospective client who told me that he chose his current consultant largely because of fees.  We had great dialogue; through a lot of hard work, he and his wife had accumulated a significant nest egg.  It quickly became apparent to me that he was not receiving financial or retirement planning advice from the consultant, as opportunities flashed in my mind that were missed for things like conversions to a ROTH IRA, risk management techniques and tax loss harvesting.

Fees are important.  More importantly, understand what you are paying for.  Fees are what you pay.  Value is what you get.

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Financial Professionals and can be reached at (715) 343-9600 or [email protected]. www.SchulferAndAssociates.com 
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.