I'm Paying How Much?

Purchasing a car can be an experience fraught with surprise.  First, there's the matter of the price you pay and - here's a hint - it's hopefully not the price listed on the window sticker. Once you negotiate your best deal, there's the matter of financing, payment plans, down-payments, and the like. Then, like a whack-a-mole, up pops a smorgasbord of fees: documentation fees, title fees, registration fees, destination fees, advertising fees, dealer markup, dealer prep fee, paint sealant fee, etc.

These fees may only be presented after you're in the final stretch of the purchase process - and therefore emotionally involved - but they are in the end always disclosed, itemized, and enumerated. You may not be happy about the fees, but they are there in black and white to see. They have to be listed, right? After all, how can you make a purchase if you don't know the total price?  The mutual fund industry has figured out a way to do just that.

In that industry, some financial advisors balk at disclosing the exact fees clients pay. Certainly those advisors know how much to pull from the account to pay themselves or the firm, but when describing what those fees total to the client, many seem to develop a curious inability to convey the precise amount the client is being charged.

One article below describes the efforts made by a Wall Street Journal reporter to determine the fees she pays her advisor.  The second article describes the best questions to ask a financial advisor to get the best answer to that question. 

https://www.wsj.com/articles/whats-my-investing-fee-a-frustrating-quest-1494209820

https://www.wsj.com/articles/how-to-get-a-straight-answer-about-adviser-fees-1494209760

It would be ill-advised for a person to purchase a vehicle without understanding all fees associated with the purchase - and those fees are only charged once. It's an even worse idea to not understand the fees associated with your long-term investments - especially given that those fees are on an account that is likely to be far more valuable than a car, and those fees are charged every year.

So, ask the question of the companies you invest through "What do you charge"? If it's tough for the company to succinctly answer, then perhaps that will tell you something about your relationship with the company.