Six Items That May Be of Concern to investors:

· Index annuity investors often have caps that limit their gains to a minimal rate of return, yet they have high surrender charges and advisors earn high commissions. Results may not offset inflation.

· Advisors help investors allocate monies and charge a management fee higher than managers who actually manage the money. Often there are two levels of fees. The mutual fund fees plus the advisor’s fees. Variable annuities managed this way are even worse. 4% or more for annuity costs plus advisor fees are often the case.

· Some advisors still charge front end commissions on mutual funds purchased or “C” shares where the salesman gets paid immediately and the investor incurs a surrender charge. Advisors often can purchase the same fund in a lower cost version with no commission.

· Large brokerage firms have wrap fee type accounts for a one or two percent fee and then they use the firm’s funds so they can earn more. These may be funds that would not be selected on merit alone. The advisor spends little time actually managing the money.

· Trade costs for stocks may appear to be low at many brokerage firms, but execution prices may be higher because of hidden commission or transaction monies paid back to the broker by the trading firm used.

· Index funds have lower costs, but during periods of neutral or declining markets may not overcome inflation. Consider that from 2003-2013 the S&P500 index doubled but buying power did not increase because of inflation. As we have experienced three decades where there were minimal or non-existent profits. Compared to traditional mutual funds index funds have been better, but in declining markets it is like being a front line British soldier in the Revolutionary War, lined up side by side and easy to shoot.

As an investment advisor myself, I have been asked many times to look over investors accounts. Often the person has had the same advisor for many years. They have a feeling something is not right but they can’t quite put a finger on it.

What I have discovered is that most often they have experienced moderate performance in good years and negative performance in declining years. If they take withdrawals out of their account when assets are down, it takes many years to recover.

There Are Three Major Issues:

· Assets are not properly protected against longer term declining markets.

· Fees are too high for the level of performance attained.

· Although assets may be diversified, too much risk is taken and the risk is not understood.

In Tony Robbins new book, ” Money Master The Game” he explains it well. Mutual funds and advisors often charge 2% in fees and about 1.25% in additional costs. Since most do not beat the indexes over a long period of time this cost is substantial.

Example: If the S&P 500 Index averages 6.5% over 50 years in an index fund with only.05%, $1.00 rises to $30 in 50 years. If because of costs you only net 5% after fees your $1.00 only goes to $10 in fifty years. Considering half of the gain is from dividends higher fees more than offset the dividends received.

Managers that actually produce high alpha are worth their fees. A study about a strategy that selected stocks that were at a low value price by definition from 2003 to 2013 selected 280 stocks that performed 10X better than the S&P 500 index over the same period proving that a diversified portfolio of stocks purchased when they were at a low point in the cycle can outperform.

Many advisors are selling growth and income and own the same stocks for their clients. You cannot achieve positive alpha enough to generate high fees long term by using a middle of the road strategy.

Remember the story of the road. There was a fork in the road and a decision had to be made by the traveler. The first traveler picked the road most traveled by and did not fare well. The next traveler met one who knew the road and picked the one least travelled by and that made all the difference.

I have been in the financial advisory business for 45 years. I have always tried to do my very best for my clients, but I have made many mistakes. The biggest mistakes I have made are to take too large a position in a stock, to protect too much and not let profits run, and to not educate my clients so they understand the risks and time frames needed to meet their objectives. At this stage in life I am 67 years old. I have a more humble attitude and a more complete understanding of the issues. I have traveled the road many times.

Today, you can execute 100 shares of a stock for $1.00. You have access to the markets all over the world. You should not be dependent on anyone. You should acquire the knowledge to completely understand your choices. You should be disciplined. Your advisor should help you completely understand your choices. NO SELLING INVOLVED. You should act as general and your advisor should be your eyes and ears and take action based on your instruction while you pursue other endeavors during the day. You should have daily access to your accounts and performance data on line on a daily basis.

If you have more than $1.5 million in net worth exclusive of your home, you may be able to pay a small fee and an incentive fee when your advisor adds significant value.