There are two kinds of financial advisers, commission and fee. I don't know if Edwards is one or the other; ask them. Merrill Lynch, Thomas Jones and a lot of the other big names are commission brokers. You don't want them. In addition to charging high commissions, usually in the 5% neighborhood, some of them have their own family of funds which they will promote to you to the exclusion of other, better investment choices. Ask yourself, how likely is it for one fund family (even the good no-load families like Fidelity and Vanguard) to have the best funds in EVERY sector (large cap growth, mid-cap, small cap, international, value, etc)? This is why you pick and choose from ALL of the available funds. Many of these commission brokers' 'captive' (all from one family) funds themselves have higher management fees. Every mutual fund has a management fee that is paid out of the fund's total assets and is charged to you as a percentage of your investment. The top funds have lower fees.
You want a good fee-based adviser. You are paying for their expertise. They have a vested interest in seeing your money grow. They get a percentage of your total portfolio with them (one percent or less per year, usually paid quarterly), and if you make more, so do they. A commission broker gets paid immediately, taking a cut of every dollar you send them (money, by the way, that is not working for you. 95% of what you invest, as opposed to 100% with a fee broker), and that commission broker has that money no matter what the investment does.
To sum up: To calculate costs, you have to add the brokerage expense (either commission or fee) to the management expenses charged by the various funds.
2007-11-05 03:11:32
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answer #1
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answered by curtisports2 7
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2007-11-05 11:27:49
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answer #2
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answered by Anonymous
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