The Number One Financial Advisor Scam to Avoid

Here is the number one financial advisor scam that I have found yet. Even though it sounds great on the surface, it could end up costing you tens of thousands of dollars. I'm Tyler, a former financial advisor and portfolio manager, and now I create financial content for free to help you navigate your finances.

1. Temptation of Low Fees

This firm tempts you by claiming they'll invest your money in low-cost index funds, boasting an ultra-low fee of 0.06%. That sounds alright.

2. Assurance Against High Fees

Then the firm reassures you that unlike other investment firms, they will not invest your money in mutual funds, which charge higher fees of around 0.59%. So far, so good.

3. The Service Fee Pitfall

Next, they offer to do all of this for you for the super low fee of 0.75% of your assets. This does beat the industry average of 1%, potentially saving you tons of money.

4. The Hidden Cost

But if you followed that math, you'll see that you're now effectively paying 0.81% of your assets to be invested in a low-cost index fund—something that you could do on your own, without their help.

Take Action

Instead of paying 13.5 times the fees, take just 13.5 minutes today. Go to Bankrate or NerdWallet, type in 'best low-cost index funds of the year,' and treat yourself to a Starbucks latte of your choice because you actually just earned it.

Source