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A - Fee Detection is the process by which undisclosed or hidden fees are revealed through a detailed analysis of your investments and annuities by examining sales and marketing material and comparing them to your statements and disclosure paperwork.
Q - Why is Fee Detection a growing trend?
A – Active management has been a losing proposition for some years now and investors have become impatient. Most active managers lag their benchmarks by a wide margin. Much of this margin is due to excessively high fees, costs and expenses. Since the great recession of 2007-8, trillions of dollars have moved from active to passive investments due to this trend.
Q – Why is this a growth industry?
A – Unfortunately many investors are not told the whole story at the point of sale and leave clients with a mountain of paperwork and vague descriptions of what to expect from their investments.
Q – Who agrees with these assumptions?
A – One entrepreneur, Uri Levine has parlayed his success from start-up WAZE after selling it to Google for $1.3 billion. His company is called FeeX.
Q-How does Fee Detective work?
A- We review your investment and/or annuity's paperwork, including marketing materials, disclosures and statements (no personal information is required) and quantify ALL your fees, costs and expenses in monetary terms so you understand the real impact and how compounding fees erode your long term performance.
Q-What does Fee Detective charge?
A-We charge a consulting fee depending on the complexity and size of your Investment/Annuity. $150 per hour. Minimum 1 hour.
Q-Why would I pay you to find fees I can probably find myself?
A-Financial Institutions have become less transparent every year. You or your advisor may not even know about these hidden costs.
Experience- "I have been in the Financial Industry as a Registered Representative, Registered Principal, Licensed Insurance Agent and Registered Investment Advisor since 1989 and have recently discovered hundreds of millions of dollars in hidden fees."
Robert M Mennella - President / Founder of Fee Detective.
READ THESE SHORT STORIES TO GET A BETTER UNDERSTANDING OF HOW EXCESSIVE AND HIDDEN FEES ERODE YOUR MONEY OVER TIME or Scroll to the bottom of this page for contact info.
Are you sharing your gains with your financial advisor?
Most Advisory programs charge fees around 1% of assets. If you're paying more than that ask your Advisor for a discount or a reason why you're paying above average and what added value they provide to justify the higher fee. Also, when you review performance with your Advisor, ask if you're looking at a number that is net of all costs.
Too many Advisors show gross of fees when quoting hypothetical as well as actual performance. In order for you to accumulate wealth, you need to have net positive gains. That means your gross investment performance needs to cover fees, costs, expenses, taxes and inflation before you make dollar one. Your performance will fluctuate but your costs won't. For example, if your total gross investment return on your portfolio is 5% in a balanced allocation of stocks and bonds then it sounds good, right? Wrong!!
5% - 1.5% fees = 3.5% net of fees. Still not bad, right? Wrong!!
Unless you're in an IRA, you'll pay some sort of capital gains and dividend taxes every year. On average about 1 - 2% of your year end balance. IRAs are tax deferred, not tax free. So eventually you'll pay. Now you're at approx on average 2.7% before inflation as of this writing at 1.5%. Your net is 1.2% net of fees, costs, expenses, taxes and inflation. About what you pay in fees.
Excessive Fees Eroding your financial future?
Back in the good old days before mutual funds, there were stocks and bonds. Back then you knew how much commission you were paying in a transaction and there was very little in terms of paperwork other than a ticker tape and a confirm. A phone call and an agreement was all it took to do business and shysters were quickly outed and relegated to the ranks of hucksters and con men.
Today, clients money has moved further and further away from stocks and bonds, which are the actual investments you wind up owning at the end of the day only after several layers of fees, costs and expenses. An entire multi-trillion dollar industry has been built by the idea that you need advice to tell you which mix of stocks and bonds you should own at any one particular time by convincing people it is too complex to do on your own. Hogwash!
Although the financial industry has seen its fair share of scandal, isn't the real tragedy here that most people spend more time brushing their teeth than thinking about their investments?
Passive investments have seen massive inflows at the expense of active investment managers, who for the most part have collapsed under their own weight. Economies of scale challenges in the active space have proven that the model does not work, long term. An active portfolio manager can not produce the same results with $1 billion under management as opposed to $100 million. The transaction orders are bigger and the trades take more time to fill, hampering average costs and results. This liquidity quandary also hurts trading decisions and ultimately returns.
Vanguard has seen inflows in the trillions of dollars over the last seven years, yes trillions with a T. They grew from $1 trillion to $4.2 trillion in assets, eclipsing JP Morgan by more than $1.5 trillion in assets. That's folks voting with their wallets. Now that the fiduciary standard rule implemented by the Dept. of Labor for retirement accounts threatens to strip away hundreds of billions of dollars in future profits for financial institutions, the motivation to create complex investment strategies where the potential abuse for hidden, undisclosed or excessive fees could be magnified.
Here's an easy fix but not a recommendation. Look at the top ten holdings in your mutual funds. Imagine the savings you would have by simply buying the stocks in the top ten holdings at a discount broker and watching those stocks passively on your own. You would save the operating expense or expense ratio of the funds you own, and over time, that adds up. In today's information age you'll know just as much as the experts as regulations have required publicly traded companies not to report to any analyst in private, any material information that may impact the price of their stock. Now that there is a more level playing field for individual investors, you can be the expert by merely following some simple metrics like PE ratio and growth rates. Don't let excessive fees ruin your future.
Put down the toothbrush and pick up the journal.
Is your Private Bank a little too Private?
The word "Private" is a great word to use if you're a bank. Too much about you is public these days. Your name, address and social security number are all things that you want to keep private. However, in today's internet age, your privacy is dwindling away, everyday, by the millisecond.
So when your bank uses the word "Private" to invite you to enjoy exclusive access to their most brilliant people at the upper echelons of their organizations, keep your ears up and your eyes open. You may be dazzled by the good looking people in their Brooks Brothers suits and tight dresses but this scenario should be a flashing red signal to ALL prospects.
After you've waited too long in an impressive looking reception area and sampled the Godiva chocolate and complementary Starbucks latte while thumbing through yachting magazine, be prepared to ask some questions, especially about fees. Think of it as like going to a magic show and asking the magician the secret to his trick. They'll never tell, but your banker must, or should, not keep a lid on all the excessive and undisclosed fees that are ultimately coming out of your wallet and going into theirs.
What is this going to cost me, is a question no prospective investor should ever shy away from, no matter how much money you have at your disposal. The "Private" Bank is counting on you to be intimidated by their investment jargon and plethora of pronouncements about their "Team" of professionals around the world, working for you 24/7 to find the best investment opportunities before anyone else.
Chances are pretty good your Private Banker is late for his tee time at his private country club and may try to blow off your questions about fees with a quip or a throw away line. Stand firm. Don't be distracted by his wall picture with the POTUS or his Joe Montana signed football in a glass box next to his cigar humidor and trophy case. I'ts all a show and you'll be keeping his membership current at the club should you be roped in by this presentation.
And now the private bank experience is available to regular folks at the bank branch level as well. They may have just sold a house or inherited some money. The bank wants to be sure to suck every potentially qualified customer into a high fee, low return private bank investment as questionably as possible. Take for instance the come on for Chase Private Client. "You can now enjoy exclusive access to private bank strategies." The same way you would enjoy a hole in the head. After watching many of these strategies drop precipitously right out of the gate, I saw the light. Within only a few months, these failing strategies were quickly removed from their lineup after an abysmal showing. Best to keep that private.
May I point out several examples for your informational pleasure? The Health Care Strategy was released shortly before Hillary Clinton said prescription prices were too high during the presidential campaign. The Health Care Strategy dropped like a rock. The Consumer Recovery Strategy made its debut just prior to one of the worst reports of consumer spending in decades. That strategy never recovered. The Energy Strategy saw the opportunity in US fracking and higher demand for oil and gas as the economy climbed back. Too bad this was just the beginning of the world wide glut in oil that made extracting these natural resources unprofitable at the time.
And then there's the hidden costs and fees. Take the Dynamic Yield Strategy with $10, yes $10 Billion dollars in assets under management. This widely marketed strategy pushed on Chase Private Clients as an alternative to your low yielding savings account is the best example of how they hide costs. In addition to the 1.6% you'll pay every year in a management fee for the privilege to own this static allocation of mutual funds, you'll also pay a product fee. The product fee means mutual fund expenses, which is vaguely described in a two sentence disclosure then refers you to the prospectuses, which you can research yourself.
Interestingly enough, even if you had the time and the inclination to find out what these product/MF fees are, you are not given the holdings in advance or their allocation percentage to the strategy. How then can you calculate these fees? You cannot. Of course they've done the calculation internally and wow, the cost adds another .53%, not an insignificant amount. But don't worry, you'll still get access to their top of mind conversations with market strategists and CNBC contributors. That should make you feel better about paying over 2% a year for a mix of mutual funds that barely re-balance and are managed by only two people, right?
And then there's the performance reports that pretend to show you all the fees. Next time you're in a Chase branch ask for a DYS brochure. Not available online. Its private you know. The top line is GROSS of Fees with a footnote reference that this top line is NET of mutual fund and ETF fees, the aforementioned .53%. Below the GROSS number is the NET return after ALL fees, which they show as only 1% lower than the GROSS return. Huh? The maximum portfolio advisory fee is shown as 1.6% in the same document. So why are they hiding the other .60% in the performance #s? Of course, to make it look better. Who's going to be interested in a bunch of mutual funds that shift around a little bit throughout the year and pay over 2% annually in fees and expenses? Why you of course. After all, they are your bank.
"Don't liquidate your account for another purpose." You wouldn't want to upset a carefully crafted investment portfolio. This is the pitch in which the bank offers you to "borrow against your portfolio." As long as the bank has your assets, they are going to want to squeeze every last dime out of you. As part of the Private client platform, you can borrow, in some instances up to 70% of the strategies described above, 20% more than what's allowed in a margin account. How generous of them. Picture this for a moment. You've entrusted your life savings to these folks. You borrowed money against your portfolio (and paying borrowing costs of Libor plus a floating rate) as they recommended for "education, taxes, a wedding or home improvement project." And then the market crashes. If you don't have additional resources to send them to satisfy their equity requirement or margin call (as its referred to in a brokerage account), you'll be sold out to protect their interests, not yours. In a perfect storm, like a quick correction or a flash crash you could be wiped out entirely, only to see the strategy recover shortly thereafter....without you in it.
You don't need to be in a "Private Bank" to gamble and lose all your money. Try Vegas instead. Its a much better experience.
Liquid Alternatives for All
Liquid Alternatives or hedge funds for the masses as an asset class certainly sounds exciting. However, for your average investor, I would recommend extreme caution and proceed with as such. Typical hedge funds that require you to invest a minimum of, for example a million dollars, use complex investment strategies including options, futures, leverage and shorting.
Ah yes, shorting. In case your not familiar with this trading strategy let me enlighten you for a moment. If you think a stock is going lower, you'd borrow the stock from another broker dealer, or your broker dealer if you're the client. Next, you sell the borrowed stock in the open market and hopefully, if your right and the stock drops, you buy the shares back and return the borrowed shares to the lender keeping the difference in price.
Here's the catch. If you're wrong, your losses are unlimited because if the stock keeps going up and you haven't covered (bought back the stock to return to the lender), your losses can continue infinitum. In case you've never heard the term short squeeze, it means the stock is rising, there is a big short position and the shorts rush or are squeezed to cover. If they don't cover, they may be subject to unlimited losses. Imagine shorting Apple in 1997.
Liquid Alternatives are essentially hedge funds in mutual fund clothing, like a wolf in sheeps. This asset class is being pushed more and more onto unsophisticated, unsuspecting investors who are being sold on the idea that this type of investment lowers risk and increases returns.
Not necessarily. Hedge fund returns have dwindled over the years with managers cutting fees and costs. In their heyday, hedge funds would charge 2 and 20, meaning an annual management fee of 2% and 20% of your profits. So why then is this strategy now being made available to regular folks just as performance is harder and harder to come by? Answer. FEES. Liquid Alts, as they are endearingly referred to by the people selling you these investments, carry a minimum of 2% annual expense. However, they do not charge the 20% of profits. Thanks for the break, I think.
Let's take JP Morgans current unified managed account as an example. JP Morgans Core Advisory Portfolio will offer you the opportunity to add liquid alternatives to your fee based account. For that portion of the account you will pay 1.45% maximum portfolio advisory fee and at least 2% for the liquid alts. Win or lose, JP Morgan wins. Now get this. JP Morgan claims that because liquid alts are not correlated to other asset classes they lower, yes lower the portfolios risk. Really???!!! How can liquid alts lower a portfolios risk when it is the riskiest asset class in the portfolio because of the use of a long/short strategy
Then they add insult to injury. JP Morgan, due to this false narrative, inserts a bigger portion of your portfolio to liquid alts in conservative portfolios as opposed to growth portfolios. It's the great American con job. Fleece the clients least likely to question you.
I'll take my Liquid Alternative at the local watering hole, Thank you very much.
Whether the market goes up or down, your fees dont stop.
If you're in a fee based or managed account as it is most likely referred to, you pay fees when the market goes up and when the market goes down. This cannibalistic structure is most damaging to your long term performance that stunts growth on the way up and punishes you on the way down. It's a heads they win tails you lose scenario.
Take for instance the lost decade. This a term referred to the period after the dot com bubble and 911 when the S&P 500 did not grow over a 10 year period, something it had not done since the great depression. What did this mean for your fee based account? Let me count the ways. More importantly, lets look at the math.
Most fee based accounts are just asset allocations of stocks and bonds but your brokerage firm will only refer to the S&P 500 when quoting performance, so I will too. Lets say you had $100,000 to invest on January 1st of 2000 and your fee was 1.5%. In year 1 you lost 9.1%. You lost $9,100 in market value but your advisor charged you $1,500. Lets assume, arguendo that your fee is charged at the years beginning value.
Year 2. You start the year with $89,400. In 2001 you're down 11.89% but the fees kept on truckin'. Your market value dropped by $10,629 and your fee was $1,341. Disgusted yet? We're only in the second year. keep reading.
Year 3. You start out Jan 1 with $77,430. That year, 2002 the market was down 22.1%. Ouch!! Down another $17,112 and you paid $1,161 for the privalege. By now you hopefully got a phone call from your advisor after he's found his way out from under his desk. But don't worry the market has bottomed, unless you capitulated and sold, like most average investors did you're about to see some light, however you're a long way back to breaking even.
Year 4, the market starts to recover, however you start out with $59,157, down more than 40% in 3 years. This year, 2003, your account grows by 28.68% or $16,966 and your fee is $887. Your net gain after fees that year was $16,079.
Year 5, Jan. 1st, 2004, Beginning value of $75,236. Market up 10.88% that year but perpetual fees held you back. You paid $1,128 in fees that reduced your gross gain which was $8,185. Net gain that year is $7,057.
Year 6, Jan 1, 2005. Beginning value of $82,293, value up 4.91% or $4,040. Fee $1,234. Net gain $2,806. By now you stopped opening your account statements and your advisor has fallen off your speed dial.
Year 7, 2006 Jan 1 account value $85,099. Market value up 15.79% that year for a gross gain of $13,437. Fee is $1,276. Net gain $12,161. You're 7 years in and almost back to even. You're still losing but guess who's not?
Year 8, 2007 Jan. 1 account value $97,263. Market value up 5.49% for the year. Your gross gain is $5,339 minus $1,458 in fees for a net gain that year of $3,880. You just about got your head above water when 2008 comes to smack you around.
Year 9, 2008 Jan. 1 account value $101,143. Market down 37%, a painful year for most investors but especially for fee based investors who have been told "Its time in the market, not timing the market that is the key to investing long term." This adage works well for them. Not so much for you. This year you lost $37,422 and paid $1,517. The worst year for you but the best year for your advisor. Now add the fee to the loss and your net loss that year is $38,939. The lost decade has not been kind to you but your advisor just bought a vacation home. Seems fair, no?
Year 10, 2009 Your account value is down to $62,204. That year the market roars back 26.46% and your gross recovery, (no pun intended) is $16,459, less fees (they haven't forgotten about you) of $933 gives you a net return of $15,526.
Lets tally the numbers shall we. Your 10 year end total is $77,730. You lost $22,270 or 22.27%, an average of 2% a year for 10 years. You paid $12,435 in fees. Only a masochist would be happy with this result but fear not. You'll still get a basket of fruit from your advisor during the holidays.
After 10 years of watching, waiting, hoping, listening and praying, your experience has left you shell shocked and may stifle your resolve to keep this up. You go to cash, but cash pays nothing. Now your frozen while the market comes back V style. You don't trust it but it keeps coming back, just like the internet stocks of old did. Fool me once shame on you, fool me twice shame on me.
This hypothetical is of course just that. What's not hypothetical is the concept. Weather the market goes up or down, your fees don't stop. That's just a given.
Is Asset Allocation a Dead Strategy?
We've all been told that asset allocation and diversification is the key to success. Don't put all your eggs in one basket, right? Not so fast. If that basket contained Facebook, Amazon, Netflix and Google you'd far outperform all the experts that claim you increase risk by concentrating your investments. FANG stocks prove this very, very wrong in just the last few years alone.
Why do you have to own the Euro Zone while their economies languish in debt with seemingly no way out? Who thought it was a good idea to own Greece before their economy imploded? Why are you holding Japan after years and years of under-performance from an extended recession and ten years of near zero growth? Did the BRIC or Brazil, Russia, India, China story seem like a good idea?
What is the motivation for your financial institution to recommend you put your money somewhere that is guaranteed to be mediocre? You guessed it, FEES!!! If your financial institution makes you too much money, you'll expect it every year and become disappointed when it doesn't do as well. If you lose too much money you may grow tired of excuses and move your money elsewhere.
This is where the diversification narrative works well...for them, "You want slow steady growth." No, you want to capture more of the upside and less of the downside in markets. This is called ALPHA and when that doesn't happen, you lose after fees long term. Never-mind. Many investors are programmed to expect losses. Past performance not a guarantee of future returns.
Money managers have become content on the buy and hold strategy for too long. Investors are tired of the rhetoric and are moving trillions of dollars to passive investments. Remember Peter Lynch of Fidelity fame. His best advice to investors was to invest in companies they know firsthand. If you use Johnson and Johnson shampoo, buy J&J stock. If you like and use Apples products, buy the stock, and on and on. How did Lynch make billions for his investors and himself? He kept it simple.
My advice would be the same. KISS. Keep it simple, stupid. Simple works. Complicated is well...complicated. Filter out the noise in the media and the talking heads forecasting the next earnings report or economic number. At the end of the day you want to invest in a growing company, in a growing industry in a growing economy. Pretty simple stuff. Yet your financial institution will suggest you need them to do this. You do not. Every-time you get the gobbledygook language from a representative and don't know what the hell he's talking about, tell them to slow down and explain in terms you can understand. If you don't speak up for yourself, you will be responsible for the results.
Don't just be a sheep. We know what happens to them eventually.
Is your advisor always chasing performance?
A common practice amongst the advice givers is the idea that you should invest your money in only the best of the best. "This fund has five star morningstar rating" or "this manager is in Barrons top ten this year." What they fail to tell you is that right at that moment when you plunk your money down for the long term, the fund has peaked. If the general idea behind investing is that you should buy low and sell high, why does your advisor do the exact opposite?
Here's the reason. Its an easy, soft sell. Why wouldn't you go along with a sales pitch that says you should invest in only the best? Would you want to buy a fund with a one star rating? Of course not. There are other factors at play here, one of which is that Morningstar and others rate funds and managers based on past performance. This is why the disclosure that past performance is not a guarantee of future returns is the industry cop out. Hey, if we recommended the best and point to an independent rating agency than we've satisfied your suitability.
This is where the industry falls short of your expectations. Why can't we get a little value for that 5% upfront sales load and 1.5% annual operating expense? Take some initiative and don't tell me what already happened. Tell me what I need to know to make money for the next 10 years. Why have so many people missed such great opportunities over the last 10 years? Because no one told them to buy low. When the recession hit and the market dropped like a rock, did you stay away? Did you say "I'll wait for it to bottom out?" They even made a movie out of the handful of people who made money in the impending real estate crash. I highly recommend The Big Short.
Why did so many people get conned by this organized fraud? It was the rating agencies. The for profit entities that independently ranked the mortgage bonds as being higher rated than they actually were. And why would they do that? Capitalism. The other rating agency down the block would surely take the business if you stood your moral ground. So is the market fixed against you? You better believe it! As an investor the best role you'll ever play for yourself, should you intend on seeking professional advice because you don't have the time or the inclination to do a little common sense research, is devils advocate.
If you really want to give yourself a shot at making money, look to the out of favor companies that have shown to always come back. And look to the future for ideas in firms looking forward, like wind, solar, hydro, electric, robotics, artificial intelligence, etc., etc. Stop chasing your tail. Don't buy that highly rated fund just because five stars sounds like a winner. Look at the one star funds and say "what's my downside versus my upside here? Can this thing come back or is it a dead fish? Has it come back before?" You don't have to be an expert to try to predict the future. The experts say you can't. But they'll be glad to try for you, for a fee. A fee that you can avoid by not investing in those shooting stars.
Anatomy of Hidden Fees
As we all know hidden fees are a reality. Insurance Companies, Brokerage Firms and Banks are all for profit organizations. That doesn't mean that their profit has to come at your expense, especially if that expense is not explained to you up front in terms you can understand. Unfortunately that is all too often the case and has just become accepted as the norm.
How did this giant rift between what these institutions are legally required to disclose in the fine print and what the regular folks with no legal or finance background need to know to make an informed decision?
As we've come to know the term Fine Print, it is something of black hole. Lawyers ramble with gibberish and legalize that no one other than maybe a securities attorney could understand. And even then they'd be hard pressed to translate that language into something discernible to Joe Public. Its time for transparency. As consumers become more savvy and less reliant on the reputation of large institutions, these institutions survival will depend on how trustworthy they are with their clients or not and if not they will certainly collapse under their own weight and greed. That's just the evolution of business. When you stop adding value and start detracting from it, you will lose in the long run.
Case in point. JP Morgan Chase Bank N.A. now offers to branch based bank customers, exclusive access, through Chase Private Client, to their private bank strategies. One of these Specialized Strategies is called the Thematic Advisory Program. Inside the Thematic Advisory Program is a strategy called the Dynamic Yield Strategy. This all sounds very exclusive and chic. This strategy has $10 Billion with a B under management, is 95% comprised of mutual funds with an average expense ratio of .53%. In addition to this above average expense ratio that is not disclosed in client approved brochures, there's the portfolio advisory fee. This is the fee you pay to the bank whether you make money or not. This fee is currently at 1.45% that started this year. Between 2013 to 2016 the maximum portfolio advisory fee was 1.6% for the first $250K invested.
You'll find these additional fees inconspicuously hidden in the foot notes of the performance reports. When the strategy was only available to the private bank clients from inception in 2010 to 2013, the maximum portfolio advisory fee was 1.15%. When they started offering exclusive access to branch based bank clients they raised it to 1.6%. The fact that they lowered it this year certainly says something about unsustainable inflated fees.
Go to my Linkedin page for a link to the One Drive document. As you can see in the document I'm sharing Go to my K, a picture is worth a thousand words. I've compared the client approved performance numbers in the brochure JP Morgan is currently showing to clients (this is the April brochure) VS. the one below that shows what the foot notes attempt to explain are your actual fees. You tell me if this is a fair disclosure? The performance you are shown is as follows. Top Line... Gross of Portfolio Advisory Fees with a footnote that says net of product or mutual fund fees. How do you know how much the product fees are? You don't. My sources inside JPM say those mutual fund expenses are quantified in Internal Use Only documents. Why must I figure it out myself by reading dozens of prospectuses and doing complex mathematics when you already know what the answer is? Doesn't seem too transparent does it?
In fact, the maximum portfolio advisory fee you see by comparing the Gross number to the Net number are for clients paying less than 1%. The only way to get a 1% or less fee is if you invest over $1 million dollars, only then do you get that break-point discount. Check the fee schedule. If you're investing the minimum of $100k to $250K your fee is currently at 1.45%. The math is not the hard part here. The deception is. When you are shown an illustration do you question it or trust it? If you read the disclosure for the lower fee in the performance numbers it is due to the private bank only maximum portfolio advisory fee of 1.15% that is calculated prior to 2013, thereafter the fee applies to all applicable accounts, whatever that means. What they're really saying is.. this is not what you'll pay but we've backed ourselves up legally with this confusing explanation and here are some clues if you want to try and figure it out on your own.
Why is it so hard for them to show you the real fees, costs and expenses? Here's why. It doesn't sell. Would you pay 1.98% to make 2.05% as in the three year performance? That makes them an equal partner in building your wealth.. and theirs. Let's take the performance since inception. Your paying 1.98% to make 3.75%. If you take taxes and inflation into consideration you are making less than 2% a year over 7 years. All the while the general markets are up double an triple since then. This doesn't seem fair does it? That's because its not. The risk reward here is stacked against you. Internal reports have this strategy starting out in 2010 showing the underlying mutual fund investments were 50% below investment grade. Today they're at 40% below investment grade. What happens when rates rise? Bonds Fall. Therefore, you take all the risk and they'll take most of the reward. It wouldn't be so bad if you knew that upfront but unless you have an MBA in finance and the inclination to question it, you're being duped by the worlds most respected bank.
Bridgewater, NJ 08807, US