You might sit down with your broker or financial advisor or review your employer-provided 401(k) once a year, but for for the most part, you put your faith in someone else's hands.
That's when seemingly harmless fees are free to fester.
"It's not like you can try calling (brokerage firms) and ask them what they charge. They don't publish a fee schedule," Mike Sha, CEO of portfolio tracking site SigFig told us . "We've talked to people who work with brokers or advisors and they have no idea what the fee structure is in other firms."
With no other fees to compare your own to, you could wind up paying for far more than you should – especially if your broker's working on commission.
Among SigFig's users, more than 60 percent of investors working with high-fee brokerage firms are paying a staggering $25 per trade – with some as high as $400 per trade.
In fact, a new study by Woodbine Associate estimates broker fees could be sucking as much a $5 billion from mutual funds, pension funds and regular investors each year, according to the NYT.
Front load or back load fees, for example, are like cutting a check to your broker for 5 percent for simply selling you a certain fund (front load). Or, imagine cutting them a check if you decide to exit a fund later (back load). These commission-based fees are the reason the broker model is so loathed by consumer advocates and ex-Wall Streeters.
But we're not just talking about commission fees charged by brokers. Everyday workers stowing funds in a 401(k) or IRA could lose up to $150,000 in fees over their lifetime.
The hard part is figuring out which funds are working more in your broker's favor than yours.
You could take the indirect approach and do a little homework, which is easier than ever thanks to a crop of new tools online. SigFig, Jemstep, and FutureAdvisor can each show you exactly how your funds are performing and lay out how much you're paying in fees.
"There's no reason you shouldn't as an investor sit down with your broker and say, 'I want to talk about the services I'm getting from brokerage firm X and you," Roy says. "Tell them, 'Before you invest in a fund on my behalf, please contact me to explain why that fund is so superior that I should pay for the privilege of giving you my money."
If you put the onus back on them, chances are they won't put up a fight and risk losing a client.
Opting for a fee-based advisor could be your best bet, as don't work on commission. Find one with the National Association of Personal Financial Advisors , which has a great search tool to track advisors in your area. All of their advisors are under fiduciary duty to work in your best interest.
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