2. High Fees

Our friend and neighbor worked with a local financial planning firm with high-tech financial planning software. They were concerned about their service cost and asked us for a second opinion. We discovered that they were paying a high all-in fee above two percent.

High fees impact performance. The family paid an annual fee to their advisory firm and an additional yearly fee of three-quarters of one percent for the mutual funds in their portfolio.

Over 20 years, an additional fee of just 0.50 percent per year can substantially decrease your gains. This should make you cautious about the impact of fees on your ability to achieve the investment performance you expect.

Are you concerned about the impact high fees could have on your portfolio? It could be time to get a second opinion to find out whether you could lower yours.