Updated: Mar 30
People mistakenly associate the biggest issue with high fees to be the annual drag on returns, but this is not the most detrimental aspect of overpaying an advisor. In this Insight video, Bill digs in to the effects high fees have on portfolio risk - which are exacerbated during volatile markets.
Transcript: 0:12 Today I wanted to talk about the relationship between fees and risk taking. Risk can be defined in lots of different ways. And the majority of the time, risk isn't detectable, especially unnecessary risk. High fees in the industry aren't just a slow and steady bleed on performance over time, like the messaging from a Vanguard perspective is. 0:40 High fees lead and force by necessity increased risk taking, which is incredibly challenging to deal with from an overall portfolio perspective. In normal markets, you don't really see things that are really risky. Well, we're in an environment that isn't Normal right now and we're seeing incredible price declines. 1:04 Avoiding unnecessary risk taking in a portfolio on the front end during periods of good time will help reduce the challenges associated with being out of position when financial markets inevitably go through periods of under-performance and exceptional downside volatility.
About WealthFactor: A Lake Oswego based investment adviser and wealth manager serving local high net worth and ultra-high net worth investors. Founded on the idea that high fees force unnecessary risks when providing investment advice. By leveraging the investment methodologies of the largest passive and rules-based asset managers, WealthFactor seeks to pass on the benefits that efficiency provides through financial technology on to its clients. WealthFactor offers custom investment advice services conveniently through separately managed accounts in each investor’s name. For more information visit www.wealth-factor.com.
About Bill Woodruff: WealthFactor’s founder has been investing in publicly traded financial markets for over 20 years. His career includes founding an alternative investment manager, launching and managing a mutual fund and serving as a managing director of a publicly traded investment manager. With over a decade of experience serving high net worth investors Bill's skillsets uniquely blend an understanding of investor needs with an extensive background in financial markets and investing.