conversation: User (Abigballs): "A few of my buddies were talking about their retirement funds and I asked for the stock ticker of their investments. All 3 of them which used a financial Advisors were getting hit with front load fees (none of my buddies were aware). Why would their "advisor" put them into these type of funds when Vanguard vehicles have no fees? None of the Advisors worked directly for the fund, but are they getting a back door commissions on giving bad advice? I assume these would be on top of the fees they are already getting paid."
  Self: "The investment world is moving beyond mutual funds, with most advisers going with ETFs instead. These funds have a very low expense ration .15-.5 for the most part and follow an index. Then the adviser will charge a fee to manage the account and allocate it properly(generally 1-1.5%) The management fee is charged every year, but the adviser and his team should be spending the time to do the proper research to put you in the appropriate ETFs.(this is what you are paying him to do). Also, any re-balance or transfers should be included in the management fee..you shouldn't have to pay for it. \nBasically, by proposing ETF's your adviser is much more responsible for managing and maintain the health of your account. On the other hand if he just puts you into a mutual fund, which have fund managers built into them, he's going to collect the commission and move on. It's sad that this is the case in a lot of circumstances, however there are changes being made to the industry to move away from this. \n\nlet me know how it goes, if he can't help you, reach out. "
  Porencephaly (Porencephaly): "I don't know why that approach can be recommended either for most people. Vanguard will rebalance your holdings for you for 0.15%, not 1.5% (ie, by using target retirement mutual funds)."
  