Quoted: Cohutt,
I already go through an adviser. Just trying to make sure I'm getting both sides of the story. I also do my homework. Sometimes I wonder why he likes certain funds. Do these advisers get any "perks" from the fund companies for pushing certain funds?
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thats understandable and not a bad practice... since just like going to the a doctor, no matter what he advises, you are still reponsible for your own health. same for the money- advisor is a tool for you to use
perks? regulators have effectively cut all of that type of special comp to advisors for one fund over another. all fund expenses to investor are by prospectus, including compensation to advisors and distributors. you have sales charges and you have "trails" which are ongoing service fees paid to advisor out of 12b1 fees. these fees to advisors are lowest on A class shares (.15 to .25% usually) and higher on B and C class shares (add .50 to .75%). (note: .15% = .0015, not .015 or .15... less that 1/4 of 1%. works out to be $15 per year on $10,000, les sthat bank account service fees..most people realize this but for clarity it is worth mentioning- )
for larger purchases the A shares work out much better for long term investors ( due to lower up front charges), the c shares might make sense in some cases, I have no use for B shares (they will go away soon- not a good deal)
what is important is low ongoing expenses- higher annual expenses fees just keep eating away over time, and on a growing pile of money (idealy it grows, right?)