Most investment fund clients have no idea how much their investments are costing them in terms of management fees, commissions and other hidden costs, according to money manager Greg Phelps of Redrock Wealth Management.
Consequently, Phelps, through his flat fee investment planning service Portfolio Architect, is offering accounting services to clients that would scour through all of their funds to capture all of these hidden fees and expenses.
“Clients need to know this stuff. If they don’t know what they are paying, how can they know the value of what they are getting,” Phelps told Money Management Executive. “The opacity of these fees is a problem of epic proportions.”
The service, called Investment Portfolio Review, is a mutual fund fee and expense audit that Phelps says provides an in-depth and detailed accounting of all mutual fund and ETF fees to its already impressive lineup of asset allocation analysis, color coded fiduciary scorecards and an action item checklist. The information provided includes total operating expenses, 12b1 investment advisor fees, and all commissions that are paid and who they're paid too.
Phelps said he launched the service in response to a booming demand by retail investment clients, lawyers and accountants for help in sniffing out these expenses.
“When clients come to me on this subject, they never really know the true fees they are paying on these investments,” he said. “They have no idea what they are paying on expense ratios or 12b1 fees.”
The review costs $349 by itself or also comes as part of a larger $449 package that also includes such services personal risk profiling, rebalancing and retirement plan recommendations.
In addition to client investment research, Phelps’ services have been used in a number of court cases. He encourages clients to use the service as a means for negotiating better rates with their financial advisors.
“They can take this information make to their advisors and tell them ‘You didn’t tell me I had to pay this and this and this!’” he said.
Tommy Fernandez writes for Money Management Executive.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access