What are these percentages I pay with advisory firms and/or financial planners?

As we go through life, it’s okay to take a step back and question the world around us…especially when it comes to our financial wellbeing. That’s why we are launching our series, “Asking Better Questions.” This month’s featured question: “What are these percentages I pay with advisory firms and/or financial planners?”

It’s a great question! Moreover, if you take this question a step further, “Why do I pay percentages with my advisory firm or financial planner.”

Name anything else in life that you pay for using a percentage. When you buy your home, you know what you paid for it and you know what the payment will be. With your investments, however, the percentage you pay is often based on the assets that are being managed, which means that amount changes from quarter to quarter and year to year. Does your house payment do that? What about your car payment?

Talk to your advisor and put some dollars and cents to that percentage fee. Only then can you understand what you are paying for and make an assessment of the value you are receiving.