Getting out of C shares
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email asktony@tonynovak.com.
Q: When I retired I visited a financial planner who helped me choose a well-balanced mix of mutual funds. I spread the $240,000 among five different funds within the same family of funds. They are C shares and now I understand that the planner's charges are 1% or about $2,500 per year! How do I get out without paying another fee?
A: New rules make it illegal for a securities broker/dealer to do that transaction now (at least at that same price), but at the time of your retirement those rules did not exist. These charges are called "12(b)(1) fees" that used to be popular with financial planners but have since been replaced with less expensive investments. Still, you need to get away from forking over $2,500 of your earnings every year over to a broker. There are two ways to accomplish this: It is possible to change your existing funds to no-load form with the help of a non-commissioned investment adviser, or, alternately, you could move the money to a firm that has no built-in broker charges. Either way, you will eliminate the fee.
Summary
More resources:
www.wealthmanagement.us.com