Rowan Financial LLC
Dave Rowan, MBA, CFP® is the founder of Rowan Financial, LLC. His mission is to enable his clients to achieve a future that is even brighter than their past and present.
Dave primarily attracts clients who are contemplating or experiencing a career transition. This includes moving from one employer to another while remaining in the same field, pursuing an entirely new profession, starting up a small business or embarking upon an encore career. Dave provides his clients with the short-term guidance necessary to successfully navigate these often stressful transitions with more confidence and financial security than they had ever imagined was possible.
Dave transforms the lives of professionals and entrepreneurs across the country with his expertise through his free online newsletter and blog. Each issue contains high value content that enables readers to make the most of their career transitions, not only from a professional development standpoint, but also in terms of their financial and personal goals.
Dave is a Certified Financial Planner® and is also a member of the Financial Planning Association® (FPA®). His background also includes a BS degree in Chemical Engineering from Penn State and an MBA from Lehigh University.
Dave is a sought after expert in the financial news media. He has been featured in various online publications including US News & World Report, NASDAQ.com, The LA Times, Yahoo! Finance, Investopedia, and The Christian Science Monitor.
Dave grew up in the Lehigh Valley of Pennsylvania and has lived in the area for most of his life. He currently resides in Bethlehem with his wife Stacy and their two daughters. He loves walking and hiking in nature, football, lacrosse, yoga, reading, writing, shopping at local farmers’ markets, eating healthy food, an occasional battle on Clash of Clans, and bringing positive energy to his work and his relationships with family and friends.
BS, Chemical Engineering, The Pennsylvania State University
MBA, Management of Technology, Lehigh University
Dave Rowan | Rowan Financial
The answers you've already received have been absolutely outstanding, so I really have no other information to add to answer your question directly.
What I love about your question is that you (along with many other investors) are getting dialed into the HUGE impact that fees can have on how much money you can save in retirement.
Although not directly related to your question, you can go to the attached article and see how lowering the fees you're paying by as little as 0.9% a year can add up to about an extra $1 million final balance in your retirement account after 50 years of saving:
Unfortunately, it is easy to rack up that extra 0.9% in fees whether that be via front-end or back-end sales loads or with funds that have high expense ratios.
As stated by the other advisors who answered your question so well, stay away from funds with loads. This will keep more money growing in your account and less money going out the door in unnecessary fees!
With Kind Regards,
Thanks for this question. The expense ratio is continuously charged and is reflected directly within the price of the ETF. You will not see this charge listed as a separate fee on your statement.
As an example, let's say that you purchased one share of an ETF that was trading at $100, with an expense ratio of 0.25%. Let's also say that you held it for a year and that it increased in value by 7%. If there were no expense ratio, the price of the ETF at that time would by $107, reflecting your entire 7% gain. However, the price you'll see is $106.75, reflecting the 0.25% expense ratio charged for the year.
Hope this helps!
With Kind Regards,
Thanks for this great question. It is a natural tendency to want to focus on a shorter time horizon as you approach retirement. However, we also know that you will not need all of your retirement savings at the beginning of your retirement.
I would recommend working with a financial advisor to develop a formal Retirement Plan to assess your readiness for retirement. If you'd like to do some rough math on your own, you can refer to the following article I've written:
Once you've assessed how prepared you are for retirement, you can then decide how much risk you need to take within your portfolio. If you have more than enough money saved to fully fund your retirement, you can consider taking some risk off the table and allocating more money to more stable, lower expected return investments. However, if you're still playing catch up on retirement savings, you may need to stay aggressive and lean more heavily into equities.
I hope this starts to answer your question and good luck with planning for this next wonderful phase of your life!
With Kind Regards,
Yes, many advisors will offer a valuable "second opinion" as you've described it above. I personally call this Financial Advocate services and charge on an hourly basis.
Financial planners vary widely in terms of their rates. Most fall within $150-$300 per hour.
Just as an aside, you may want to consider shopping around for a new advisor while you're on this mission. Insurance companies are notorious for the number and volume of fees they pass along to their clients. Hopefully, your advisor doesn't fall into this camp, but doesn't hurt to ask how much they charged you in fees, commissions, and front or back end loads.
You are making a wise choice to seek out a second opinion on your finances. Good luck working through the process!
With Kind Regards,
Glad you are asking this question. Minimizing commissions and fees can have a HUGE impact over the course of your entire investing career. Here are 3 ways:
- Invest in Exchange Traded Funds (ETFs) rather than Mutual Funds. The expense ratios are almost always lower for an ETF versus a comparable mutual fund. It is now very easy to build a low cost, well diversified portfolio using ETFs with an expense ratio of 0.25% or less per year.
- Avoid products with front-end loads, back-end loads, or 12b-1 fees. These are typically found within Mutual Funds, but not ETF's. Read the fund's prospectus to know whether these fees are associated with any product you are investing in.
- Seek out ETF's with no trading fees. Many asset custodians charge between $7.95-$9.95 per trade, however, a growing number of fund families are waiving trading fees on their ETF's. As an example, Charles Schwab offers a full range of ETF's that have no trading fees.
- If you do decide to invest in a fund with a trading fee, try to invest over $1,000 per fund. To keep the math simple, let's say you are investing in a fund that charges $10 per trade. If you invest $1,000 in that fund, you will pay 1% ($10 out of the $1,000) for your initial investment and another 1% when you sell the fund for a total of 2%. However, if you are only investing $100 in the fund, you're paying the equivalent of 10% for the initial investment ($10 out of the $100) and another 10% when you sell for a total of 20%. You'll need to earn an awful lot of return to overcome those trading costs!
- If you decide to work with a financial advisor to help you with your investments, look for one who charges 1% or less of Assets Under Management for their services.
Thanks for the great question and good luck keeping those fees to a minimum so you can keep more of your money growing in your accounts on your behalf!
With Kind Regards,