October 13, 2016
Do you remember the term “babysitter”?
I don’t think it’s used much anymore, but growing up as a kid in the ‘60s, my parents arranged babysitters for me and my brother all the time. Our favorite babysitter was a nice ole’ lady by the name of Ms. Fannin. Ms. Fannin would babysit us so my Mom and Dad could go play in their dance band. Around seven at night, just before my parents would leave the house, Ms. Fannin would arrive armed with two 16-ounce bottles of Pepsi and a couple bags of Tom’s Toasted peanuts.
Let me tell ya, in the ‘60s, it didn’t get any better than a 16-ounce glass bottle of Pepsi and a bag of Tom’s Toasted peanuts.
So, while our parents were belting out tunes at the local country club, Ms. Fannin watched over us to be sure we came in from outside when the street lights came on and she made sure we didn’t break anything or do anything stupid. For her time babysitting, my parents would pay her a small, yet fair wage for her time.
Well, from the looks of what I see going on in the financial world, it appears that more and more advisors are doing nothing more than babysitting their clients’ money. Yet, unlike Ms. Fannin, who charged a small wage for her babysitting services, these folks are charging an arm and a leg to watch over your money.
Just the other day, I met a gentleman frustrated that his advisor was charging too much for doing too little. We determined, that on his $250,000 account, the advisor plus the fees charged by the mutual funds he selected was getting over $5,000 a year.
That’s $5,000 for babysitting…quite a bit more than what Ms. Fannin used to charge.