If you have found yourself speaking to numerous financial consultants, all of whom provide you with inconsistent advice, and it is time to rethink your strategies. The reality is, however, that finding a financial consultant is about two key things: the experience of the consultant and your willingness to behave as a solid investor. This is something that financial groups like Golden State Financial Group help their clients to understand.
Golden State Financial Group on Mutual Funds
First of all, the majority of financial experts now try to avoid mutual funds and for good reasons. The biggest reason is that they are full of hidden fees. Most funds have upfront costs of at least 5%, followed by distribution, marketing, and advertising fees (usually around 1%), administrative fees (around 0.40%), and management fees (around 1%). Then, there are a variety of “soft” costs linked to trade commission, which can be as high as 4%. Mutual funds are still popular however, which is because of one of two reasons:
- They are a fad. Everyone has heard of mutual funds, so they automatically assume that they are good.
- The consultant truly knows what they are doing and recommend them because they know they are financially sound.
Your responsibility as the account holder is to find out which of the two above options is the right one.
Advice Costs Money
Another thing that is important to understand as an investor is that, if you truly want superior advice, you will have to be willing to pay for it. The services of organizations such as Golden State Financial Group do not come for free, nor should they have to. Yet many of us live in a something for nothing state of mind and we believe that the best deal is the one that costs the least. This isn’t true. A truly good financial advisor is expensive, but they also bring about the greatest returns. Your responsibility as the account holder is to find out whether they charge a lot because they are really good, or whether they charge a lot because they hope you will assume that they are really good.
You Need to Ask Questions
The final thing to remember is that you have to ask question as an investor and account holder. You are outsourcing your financial future, but that doesn’t mean you shouldn’t be involved in it anymore. After all, this is your personal future that is being considered and you need to understand how the consultant aims to help you achieve your goals. You should ask not just how your money is being invested, but why, and what you can expect from that as well. You should request periodical reviews to determine whether the strategy is on track and still fit for purpose. You cannot simply expect a consultant to take your money and make it grow without you understanding how they are doing what they are doing.