My wife and I each have a small Roth IRA that we started through our Northwestern Mutual financial advisor. All of the money is invested in American Funds American Balanced Fund-A (ABALX). There is about $1800 in each account and we are automatically contributing $50 to each account each month. We receive our statements directly from American Funds and they charge us $10 per account per year.
I have a pension and 401K through my employer. My wife does not work now, but she may go back to work once our children get older.
Our goal for the Roth IRAs is to have an additional cushion on top of the pension and 401K. Our advisor recommended the fund we have now because we hope to retire in about 25 years and we would prefer to leave the investing to the experts rather than micro-mange it ourselves.
Our advisor recently called us and set up an appointment to "update some paperwork" (his words) for our account. I had to cancel the meeting the day before it was scheduled to take place because our child was sick, so the advisor and I talked on the phone instead. He told me that some changes are required for our account because of the Department of Labor fiduciary standard change. The transfer would be a "transfer in kind."
I am ok paying the $20 per year for the two accounts but I am concerned that $100 per year will eat into the returns that we are getting on our small investments. Maybe I am reading too much into his words, but I would not describe something that is going to cost me $80 per year as just "some paperwork."
I am hoping to get some fact checking on what our advisor is telling us. Based on Northwestern Mutual's reputation, I don't believe we are being mislead, but I don't feel like I am getting the full story. Since our plan is to invest in only one or two funds, would we be better off switching to a different broker that would not charge us $100 per year?