Last month, we covered how attorneys aren’t omnipotent, at least not all by themselves. At work and for your wealth, effective networking and team power are often the keys to success. Another quality most attorneys share is above-average intelligence. After all, those bar exams aren’t for the weak-minded. 

This means you probably already understand how fees work. For example, it makes sense that there are $300/hour and $600/hour attorneys, priced on a scale based on experience and expertise. Either may be worth every penny, depending on the meaningful value they add. But either can be money down the drain if they aren’t pulling their weight. 

The same could be said for investment fees. The difference is, in your own world, you know right away if someone isn’t earning their keep; you’re the one who has to pick up their slack!

How do you know what investment fees you are paying?

Unfortunately, with investment fees, it can be devilishly difficult to determine whether they’re fees well-spent, or just plain spent. For that matter, you’re probably unaware of how many fees you are spending to begin with. 

If you’ve always figured you should know what your investments are costing you, but you never really have, it might help to know first: It’s is not your fault. The financial industry has long grown fat and happy by figuring out how to make it hard for even highly educated people to tell just how much they’re spending on what. Even though there are lots of regulations aimed at improving cost transparency, as the recently departed John C. “Jack” Bogle once wryly observed, “There are few regulations that smart, motivated targets cannot evade.” 

As a result, many highly opaque and expensive investment loopholes remain quite well hidden. Granted, they’re there if you know where to look … and if you have the time to pore over the lengthy disclosures, transaction sheets, and reporting required. But you and I both know, you’ve got better things to do with your time. 

What can a wealth advisor cost you?

That’s why hiring a wealth advisor can pay for itself many times over, if that advisor offers far more than basic portfolio management for the price. Their services should include helping you lay bare the costs involved. And by the way, those costs should include their own transparent fee, which should be the only way they earn their keep – no third-party commissions or similar conflicts of interest to cloud their judgment. 

Here are a few other ways we strive to add cost-effective value at Cogent Strategic Wealth: 

  • Engaging in continuous due diligence on the fund managers we recommend, to ensure their costs are highly competitive on an apples-to-apples basis. 
  • Collaborating with THE BAM ALLIANCE to drive down costs even further through economies of scale and collective bargaining power. 
  • Incorporating subscription resources to dig even deeper into otherwise opaque pricing (such as using a Bloomberg terminal to identify often-excessive bond markup and markdown fees).
  • Establishing an Investment Policy Statement to help families invest according to their individual plans; this in turn drives down transaction costs through more disciplined trading. 
  • Aggressively pursuing tax-minimizing strategies on a number of fronts. 
  • Educating and informing clients and the public alike about cost transparency concerns. 

We also offer attorneys a complimentary Second Opinion Service, which includes digging into your current investment portfolio to reveal exactly what fees you are paying. Even if you discover the fees you are paying are fair and reasonable, wouldn’t that be good to know, without having to do all that research on your own? Give us a call, and we’ll get to work on it.