Looking Beyond the Balance

In the next few days many of us will receive our quarterly investment statements.  Few will open the envelope and even less will look beyond the balance.

This month I urge everyone to look deeper; look beyond the balance.  Look at the investments.  Look at the transactions.  Read the fine print.  Try to find the cost.  Did he just say cost?

If you thought you were receiving a complimentary service, think again.  If you want an introduction to investment fees, first check my blog here: Do Your Investments Cost Money, then come back.

Then ask yourself when was the last time you heard from the person listed at the top of your statement.

What was the reason for the call?

How often do they reach out?

What should I expect from this person?

Are they providing you with value that is appropriate for what you are paying?

How do you know?

For anyone that has a TSA for their 403b, you can multiply your balance by 2.5% and that would give you a rough estimate of the total cost of your 403b per year (please understand there are many fees imbedded in a TSA so your personal account can be higher or lower than my estimate above).  This means, if your 403b account value is $100,000, then you are paying approximately $2,500 per year in fees!  If you want to get a more accurate estimate of cost, please see my new calculator by clicking 403b Calculator.  This is a great tool to see how cost will impact your account balance over time.  If you have a statement in front of you, it should take you about 5 minutes to enter in the data.

Of course, you can always send me a recent statement and I will gladly provide you with a detailed breakdown of the costs.

If your wondering if you should receive more attention for the price you are paying, then your not alone.  I speak with clients regularly about the cost of their investments and the value they should be receiving from their advisor.  Unfortunately, more often than not, value and service provided does not match price paid.

Fortunately, there are many alternatives to consider.  But today, I just ask you to look beyond the balance.