As an investor, one of the key strategies for maximizing your returns is to minimize the fees you pay to your wealth manager. While it may seem like a small percentage here and there, over time, these fees can add up and eat into your overall returns. In this blog post, we will discuss some strategies for prioritizing reducing fees with your wealth manager.
1. Negotiate Fees: One of the first steps you can take is to negotiate the fees you pay to your wealth manager. Many wealth managers are willing to lower their fees, especially if you have a large portfolio or if you are a long time client. It never hurts to ask for a fee reduction, and the worst they can say is no.
2. Consider Passive Investing: Active management fees can be significantly higher than passive management fees. Consider switching to a low cost index fund or ETF to reduce the fees you pay. While you may not beat the market every year, over time, the lower fees will likely result in higher returns.
3. Choose Fee Only Advisors: Fee only advisors are paid directly by their clients and do not earn commissions on the products they recommend. This can help eliminate conflicts of interest and ensure that your advisor is working in your best interest, not their own.
4. Consolidate Accounts: If you have multiple accounts with different wealth managers, consider consolidating them into one account. Not only will this make it easier to track your investments, but it can also help reduce the fees you pay overall.
5. Review Your Statements: Make sure to review your statements regularly to ensure that you are not being charged any unnecessary fees. If you notice any fees that you do not understand or do not remember agreeing to, be sure to question your wealth manager about them.
By prioritizing reducing fees with your wealth manager, you can help maximize your returns and grow your wealth over time. Take the time to review your fees, negotiate with your wealth manager, and consider switching to lower cost options to ensure that you are getting the most out of your investments. Your future self will thank you for it.