Overheard my dad talking to his broker about a fee I never knew existed

I was visiting my parents over the weekend and my dad was on speaker with his investment guy. He was asking about a 'wrap fee' on his account, something about it being 1% a year. I always thought brokers just charged for trades. My dad explained it covers all the advice and management, so it's not just a one-time thing. It made me think about my own simple bank investment account where I just pick from a list of funds. I don't get any advice, but I also don't pay a yearly percent. Now I'm stuck wondering if paying for that help is worth it, or if I'm better off on my own. Has anyone else done the math on a wrap fee versus just going it alone with a basic platform?

3 comments

Log in to join the discussion

Log In

3 Comments

diana_grant6mo ago

Do the math before you wrap your money in a yearly fee.

5

elizabeth9636mo ago

My buddy lost a ton to fees last year.

5

davis.dakota4mo ago

Do the math on what 1% costs you over 20 years - it's probably way more than you think, especially if you're young. You might be better off just throwing money into a simple low-cost index fund and forgetting about it.

3