Last week, I received the following email. I have changed the name of the firm for the safety of the author:

Flexo-

I enjoy reading the posts on your blog ‘Consumerism Commentary’. It is a well put together site. I was reading a post on 9/29 about your brokerage recently charging you an annual fee. You should check out ShareDesigner, ShareDesigner is one of the few brokerages around that does not charge you an annual fee. Furthermore, you will not be charge inactivity fees if you decide you do not want to trade.

The reason I write is to see if I could interest you in putting a ShareDesigner link on your website. Being that it deals with personal finance, I think there would be a good possibility that a small discrete link to our website (for those that read your blog) would be able to earn you some additional money. We pay 20 dollars per opened and funded account, and the readers of your blog just might be the right targeted group for this to work.

I’m not sure how I feel about this. There are fees associated with the account (transaction fees, like all brokers) but no monthly maintenance fee, only for the lowest “version” of their service. I suppose, according to this afilliate program, if I could get one new subscriber a month, the account would be free to me.

I don’t think that the number of readers I have can support one new referral a month. So, I’ve pretty much decided that this wouldn’t really be worth it to me. However, I did write the individual back asking if they would be willing to refund the annual and/or transfer fee incurred by my previous discount brokerage. If they were to spend that $125 ($50 annual fee plus $75 transfer fee, not yet incurred) for me, I would definitely move my assets to them. I have yet to hear a response, as expected.

I don’t like the idea of endorsing a company when being paid to do so. It happens often though, even in the blog world. You never know if the author of a website endorsing a product is being paid to. You never know if product reviews on websites such as epinions.com are actually written by the company offering that product or by honest consumers.

Blogs are often used to gain prominence in Google search listings and use that advatange to attract readers who will click through to advertisements, resulting in income for the “blog” writer. These are not blogs.

Back to the fees from last month. It turns out the old discount brokerage hid the notice of the new fees in a newsletter whose topic is general investing; just the place one would not expect to see such a notice pertaining to their accounts… They feel I have been warned and will not refund my money. Bummer.

At least I was able to negotiate my rent down, at least until the end of April.

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Before you make any decisions regarding a financial advisor, read this commentary. The article, from The Motley Fool, gives the reader some tips on how to determine what your potential advisors true motivations are and why this is something important to consider.

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Gerri Willis at CNN warns readers that they should not stop investing in a 401(k) just because the market is doing poorly (like it has over the third quarter of this year). Her five points are don’t disengage, resist the makeover urge, pick winners, don’t fear bonds (though I’m fine without them as I’ve investing for the very long term), and put your retirement on autopilot.

You’ll hear some people disagreeing with the last point. Generally, the opposition comes from people who make their living off the fees generated by financial transactions. The author suggests “maturity funds” which automatically change their equity/bond balance depending on the years remaining until retirement.

Here is my current 401(k) breakdown, which includes a company match that I may not see if I leave this company before next May:

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Is your financial manager worth it? Walter Updegrave from CNN/Money answers a writer’s question. The writer has had a financial manager in charge of $400,000 in mutual funds and stocks since 2001, to whom the writer has paid 1% per year, or $16,000 total, in fees. The assets have increased 1% over the past 4 years.

Updegrave tells the reader how to go about determining whether the $16,000 in fees was worth the 1% increase in assets. Some calculations are involved in order to create an appropriate benchmark, and Updegrave points the reader to the Instant X-Ray Calculator in which you may enter your mutual fund holdings to determine your total composition in stocks, bonds and cash.

If you’re paying a crazy fee, your financial manager damn well better be blowing past the market averages. As we all know, the likelihood of leaving the benchmark in the dust is very low.

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My previously-mediocre-but-not-horrible discount brokerage firm decided to start charging an annual fee… a fee higer than some full-service brokerages. I’m high-tailing it out of there ASAP, and I’m looking to do it without any tax implications. Although, even if I have to sell, the tax burden shouldn’t be too bad.

So, with the several thousand dollars in that account, I’m most likely looking at Scottrade. They have no annual fees and seem to be generally non-evil.

Currently, the entirety of my brokerage account is invested in AIVSX, American Funds’ “Investment Company of America” fund, which seems to do a good job of matching the S&P 500, but not much else. It also has a pretty ugly 5.25% up-front load fee, which pisses me off about as much—or more—than annual fees. In effect, every time I bought shares of this fund, I paid 5.25% higher than the market price per share, with the extra going to the broker. That also means that (put simply) if the fund was getting a 10% yield, it was only a 4.75% improvement over what I paid.

Fees like this on the smaller investors, like me, bug me to no end. It’s obvious the brokerage firms prefer the clients with large sums to invest. They are the people who make the brokers rich. The brokers should accept that (instead of giving the top investors breaks) and leave the little guys alone.

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