According to John Oliver host of the Last Week Tonight show, planning for retirement doesn’t have to be complicated nor costly if done correctly. In his recent episode, Retirement Plans, Oliver confronted the vast industry of financial services and their practices. Clarifying that certain financial advisers might not be incentivized to act in the best interest of their clients and illustrated the financial impact of hidden compounding fees negatively affects your expected investment outcome.
Regardless of the humoristic and slightly provocative manner that John Oliver exposed these findings, the outcome imposes that the average investor should start to question their investment methodology. Exposing hidden fees and understanding their impact is the key towards retaining the utmost for one’s retirement. Private investors should migrate to where fees are kept like your milk, under 1%, according to Oliver.
Another topic that was heavily debated by Oliver was the Actively versus Passively managed funds. He claims, that there is growing evidence that actively managed funds in most cases do not outperform the market and that investment professionals, the same people giving investment advice for a living, hold their personal savings in index investments.
All things considered, what should the average private investor do to avoid financial advisors with high fees, broker charges and underperforming active management? According to Oliver it doesn’t have to be that complicated and investors should follow a generic 5-step plan:
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With all investments your capital is at risk and the value of your investments and the income deriving from it can rise as well as fall.