‘Am I Getting Fleeced?’ I’m 66, Contributing $272 Per Month to an IRA and Paying $136 Monthly in Fees. That’s 50% of My Contribution

I am 66 years old, still working and with very good health insurance. My company does not have a 401(k). I do have an individual retirement account (IRA) with approximately $120,000 invested. I contribute $272 per month, yet my program fee is $136 per month. That’s 50% of my contribution. Am I getting fleeced?

-Garry

There are two points to address here with your question. The first is about understanding the way your fee is calculated. The second is to assess whether you feel that the service you are receiving is worth the fee you are paying. 

These are very important points. After digging in, you may decide that you want to make a change. But bottom line: I wouldn’t say you are getting fleeced. (Looking for a new advisor? This tool can help match you with potential advisors.)  

Calculating the Fee

It’s good that you check your account statement and pay attention to the fee. Like any other service you use, you should know what you’re paying for it. 

While you can clearly see the amount, it may not be as obvious to you how the amount was determined. Your advisor would have been required to disclose this to you at the time you became a client. Take a look at the paperwork you were given. Unless something is missing, it will be spelled out in detail. Or just call and ask. 

It’s good information to know (and understand) your fee. But I also bring this up because of how you relate your monthly fee to your monthly contribution amount. This is almost not how your fee is determined. (Looking for a new advisor? This tool can help match you with potential advisors.)  

Different Types of Fees

The amount you pay an advisor can be calculated in several different ways. At a…