“Wow,” you say, “Your financial advisor has a really nice car.” Your friend smiles. She knows what’s coming next.
“I guess you help make those massive car payments.” She just smiles again.
She invests in actively managed mutual funds. No matter what you say, she won’t fire her advisor and switch to low-cost index funds.
You try all kinds of logic. But logic isn’t working.
You explain that her advisor gets paid commissions or a trailer fee to pick actively managed funds. You say he might get kickbacks from fund companies, like trips to Bermuda or a really nice bonus.
But she still doesn’t budge.
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