15 May Who’s Hand Is In Your Pocket?

Huddle up. Let’s have a quick Strategy Session about who has their hand is in your pocket. Let me share with you a quick story of a client experience I had in the office recently.I found myself sitting across the desk from a fella who was wanting us to help him with his retirement finances.

This was the second time in the office and I had no idea if he wanted to get some questions answered or talk about strategies to consider for his unique situation. So, after we caught up, I led the conversation with, “So tell me. What’s on your mind? How can I help?”

Without blinking an eye, this fella pulls out a folder with some papers. Looks at me and says, “Listen, Matt, I want your help with my retirement investments and strategies, but before we go any further I need to know one thing.” He opens his folder and pulls out a sheet of paper and slides it across the desk to me.

Frustrated, he spins the paper around and says, “I’ve already paid these fees this year to the national brokerage firm I’m currently with. I’ve paid these fees every year. I don’t want to pay these again this year. So can you tell me, are your fees similar to this?”

Immediately knowing the answer is “YES”, my curiosity gets the best of me and I look down at the paper. On the top middle of the page is the word “fee” and to the left, there is a laundry list of items billed to clients. When I say laundry list, I mean it was 7-point font and went from the top of the page to the bottom of the page and there hardly seemed enough room to get all of the fees on one page.

When my eyes got to the bottom of the fee schedule, they went right back to the top to read the charges. The charges ranged from $3.99 up to $45. That may not seem like a lot, but when there are 30 fees to pay. THEY ADD UP!!!!

I could feel my skin starting to catch fire.This stuff makes me mad!This good man was getting nickel and dimmed, every year, for a bunch of crap. He was mad. Now, I’m mad.

I take a deep breath, look at him, and explain that those fees with our firm don’t go away. In fact, we have the same expenses, but the biggest difference with us is that instead of saying fee at the top, with our firm it would say FREE! I told him we never charge for that kind of stuff.

He had a big sigh of relief and said, “Since the day I hired this national stocker brokerage company to sell me investments, something in my gut told me this was the wrong place to be. I thought all people in your business were the same and didn’t think I had any other options to avoid this kind of stuff. For 5 years I’ve been paying this stuff and I’ve had enough.

He was relieved. Then he asked if I would be open to negotiating my fee. I said I’m always open to talk and asked him what his thoughts were. He said the fee with his current broker is .25% less than ours and he asked if we would agree to that fee. I suggested we dive a little deeper. We looked at his statements and wouldn’t you know it, hidden in plain sight was the truth.

What was the truth? The truth was that his stockbroker had sold him a bunch of commissioned mutual funds. This poor guy had no idea he was paying much more than the amount stated that he was paying to his broker. In fact, he was paying three times more than he ever thought he was paying. I could see the steam coming out of his ears.

After he realized that not only was he paying the long laundry list of fees that were disclosed to him, but also he was paying high commissions to his broker and they were hidden from him in the form of words he wasn’t familiar with. He looked up at me and said, “You mean, on top of me paying this, I’m also paying him this and this too?” I nodded me with head smoke coming out of my ears too.

He sat back in my chair and said, “Never mind. I’m getting out of that situation and joining your team”. I’m not suggesting you should be calling me. However, I believe you should take the time to find out the truth about everything you are paying.

If you truly want to optimize how you maximize the money you have for retirement, you’ve got to plug the leaks that are keeping your feet from being dry. There is absolutely no need to sign up for the price and fee gouging that Wall Street is guilty of piling on you. The fees might only seem like thousands to you, but they add up to millions and billions for Wall Street. Get mad. Get smart. Get out of that kind of relationship.

Thanks for the Strategy Session. Now go do something about it.