The compounding effect of fees is often vastly underestimated. Your calculation showing Ameriprise's 2% fee costing $359K over 30 years is eye-opening—that's effectivly a 42% wealth haircut for the same S&P 500 exposure. What's particularly concerning about Ameriprise's model is that many of their advisors are primarily Series 6 licensed, meaning they can only sell mutual funds with additional expense ratios on top of that 2% management fee. So the real drag could be even worse. For most people with straightforward situations, a one-time consultation with a fee-only CFP would deliver more value than decades of AUM-based fees.
Agree, but even more valuable might be a decent CPA firm and maybe a few hours of reading finance books or even a few decent YouTube personal finance channels.
I feel like "spend less than you make" goes a long, long way especially for those with simple straightforward situations.
It seems as if the CFP®, ChFC®, MBA people have found this post. Welcome! Please tell me if my math is wrong.
The compounding effect of fees is often vastly underestimated. Your calculation showing Ameriprise's 2% fee costing $359K over 30 years is eye-opening—that's effectivly a 42% wealth haircut for the same S&P 500 exposure. What's particularly concerning about Ameriprise's model is that many of their advisors are primarily Series 6 licensed, meaning they can only sell mutual funds with additional expense ratios on top of that 2% management fee. So the real drag could be even worse. For most people with straightforward situations, a one-time consultation with a fee-only CFP would deliver more value than decades of AUM-based fees.
Agree, but even more valuable might be a decent CPA firm and maybe a few hours of reading finance books or even a few decent YouTube personal finance channels.
I feel like "spend less than you make" goes a long, long way especially for those with simple straightforward situations.