The Skinny on Fat Investing Costs
Do you know how much you're paying to invest your money? Several factors are pushing prices down for consumers, so savvy retirement savers have options.


Recently, a new client joined my practice and her investing costs dropped by almost 70%. She was paying far too much for a big, old brand name with their fancy suits and high-rise office space. Her accountant finally convinced her that the “value” she was receiving was not worth the cost.
She’s not the only investor coming to this realization. As you may already know, the financial services industry is undergoing a massive reinvention as technology and government involvement are forcing narrowed margins. Transparency is causing “fee compression,” where costs to the consumer are coming down, but expenses for financial professionals are increasing, reducing gross profit. With shrinking income and increased regulatory costs, broker-dealers and advisers must decide what to do with their businesses. Some are adjusting willingly, but others are digging their heels in. Some insurance and investment companies are reducing costs by reducing the number of investments they offer. Financial advisers are deciding to cut segments of their less-profitable clients.
The reality is that the industry has long operated with a set of rules and expectations that I do not think hold true any longer. The seismic shift created by technology has plunged transaction costs, and the average investor can access mind-boggling piles of information. The speed at which innovative and useful investment products can be crafted and brought to market has increased dramatically. (Don’t forget, only 50 years ago you had stocks, bonds, whole life insurance and a few mutual funds. Look at the options now!) And the expectations of consumers continue to shift, often to the unreasonable, in all parts of life.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Are investors reaping the benefits of these changes yet? Possibly, but there are some challenges as some costs aren’t as easy to pull out as others. Here is a quick overview of the costs of investing:
Please note that these costs are each independent of one another. You can pay high transactional costs and get no relationship (not ideal). You can also pay modest relational costs and receive innovative products. Or you may choose to forgo the relational costs in the name of the lowest transactional costs. You get to decide what makes sense for your situation and your expectations.
However, please let me be abundantly clear — there is a cost to relationship. You want highly qualified, high-character people handling your money. And those folks will not work for free, at your job or in the financial industry. But do not resign yourself to believe the only way that you can get relationship is to pay exorbitant fees.
Here are a couple of ideas you might use to find an adviser who is right for you:
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Andy Burdsall is the president of Riverbend Financial Group in Jeffersonville, Ind., a firm that focuses on income creation and legacy planning for its clients. He is a Registered Principal with Securities America, Inc. and an insurance professional.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? Wrong
The wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term Care
Many people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?
Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last Long
According to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond Investors
High-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance Agent
Your insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
-
Two Estate Planning Issues You Should Never Overlook
This estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
-
The Four D's That Could Force You to Sell Your Business
Business owners (or their heirs) can be rushed into a sale of their company if they haven't planned for a major change in circumstances — or the four D's.