65-Year-Old Widow Shares A Cautionary Tale About Financial Advisors And Their Fees

Money in front of a laptop with a calculator
via Pixabay

Ah, hidden fees. They’re like that pesky relative who always overstays their welcome at family gatherings. You think you’ve prepared for all the expenses, planned out the details meticulously, and yet, there they are—lurking behind the glossy brochures and optimistic annual reports. Most of us just sigh and chalk it up to one of life’s inevitabilities, much like that piece of spinach stuck in our teeth after a salad.

Ramit Sethi, host of Netflix’s How To Get Rich and the podcast “I Will Teach You To Be Rich,” recently posted a reader’s email that serves as a cautionary tale for all of us. It warns about the sneaky fees associated with financial advisors.

A 65-year-old widow informed Sethi about her financial journey after reading his book. According to the letter, after her husband’s death in 2020, she received a $4 million life insurance payout and invested with Wells Fargo. Later, seeing a 6% growth in a separate $600,000 Fidelity account she managed herself, she considered switching her funds from Wells Fargo to Fidelity, which offered her numerous benefits.

“I wanted to reach out and share my experience with your book, which I finished reading a week ago,” a reader writes to Sethi. “Let me give you a little background about myself. I’m a 65-year-old widow, and my financial knowledge has been quite limited. My husband passed away in 2020, after he died, I received a life insurance payout of $4,000,000. A friend of mine suggested investing the money with a financial planner from Wells Fargo. I know, I know… I learned my lesson from your book right at the beginning!”

“On the other hand, I also have a Fidelity account where I invested $600,000,” the widow continues. “Just by managing it myself, I’ve seen a 6 percent increase year-to-date. So, I decided to call my Fidelity advisor and discuss moving my Wells Fargo account over to them. They made quite an offer: no charges for buying stocks on my own, a $5,000 bonus for transferring the money, and they’ll cover any fees Wells Fargo charges for the transfer. Plus, I won’t be charged for talking to their financial advisors. Your book really opened my eyes to these possibilities, and I can’t thank you enough. Initially, I thought it might not apply to me because of my age, but I’m so glad I kept reading. It’s truly changed my life for the better.” 

Financial Advisors And Fees

Financial advisor fees might seem minute or inconspicuous, but they can make a significant difference in the long run. That’s why it’s always a good rule of thumb to talk to a Certified Financial Planner about your situation. When contemplating significant decisions, such as where and how to invest substantial sums, it’s imperative to scrutinize these fees. They can erode your returns and have a compounding effect over time.

Being proactive and informed about such costs ensures that you retain more of your money, allowing you to optimize your investments and secure a financially sound future. Always remember: It’s not just about how much you earn, but also about how much you keep.

B. Carlisle

Contributing editor at Wealth Gang. An entrepreneur at heart, he's passionate about meaningful ways to leverage technology and social media for business opportunities and side hustles.