Submitted by the_beluga_whale t3_10q50su in personalfinance
Recently started my career as a RN (22F), had some expendable income and my friend recommended a financial advisor at Northwestern Mutual. I only have put $1,500 and they invested in FAGAX. Annual operating expense of 0.89%. I am extremely financially illiterate and I’m not sure if they are trying to scam me because I see other more diverse pro folio. Please advise.
You don't need a financial advisor and you definitely don't need to do business with Northwestern Mutual.
Read the applicable portions of this: https://www.reddit.com/r/personalfinance/wiki/index/.
Set up an emergency fund first. Then, open and fund an IRA. If you have credit card balances, pay those off.
> Recently started my career as a RN (22F), had some expendable income and my friend recommended a financial advisor at Northwestern Mutual.
Your friend did you dirty.
NWM is a notorious high-fee investment provider. You are being charged high fees for something you could very easily do yourself.
> I only have put $1,500 and they invested in FAGAX. Annual operating expense of 0.89%. I am extremely financially illiterate and I’m not sure if they are trying to scam me because I see other more diverse pro folio.
I wouldn't call it a scam, but as I said you could easily do it yourself.
Open a Roth IRA at a low cost brokerage. This sub recommends Vanguard, Fidelity, and Schwab. Then initiate a "Transfer of Assets" from the receiving firm's web site. This will pull the money over from NWM.
As to how to invest, consider a target date fund or a total market fund. See: https://www.reddit.com/r/personalfinance/wiki/iras#wiki_eli5.3A_how_should_i_invest_within_my_ira.3F
You're not getting scammed per se but you're absolutely getting ripped off. Read the wiki, close your Northwestern Mutual accont and consider the 5% commission you paid your first learning experience.
Here's a link to the PF Wiki for helpful guides and information.
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List to /u/wickedkittylitter he speaks the truth.
You should be finding index funds with very low fees. Vanguards S&P index fund it .04% Fidelity I know has some fee free ones. No need to give your money away at .89%
That "advisor" from Northwestern Mutual will just try to push whole life insurance on you. Run away from them.
They already did push it on me. I’m single, 22 years old, and no dependents. I should cancel. I realize that I’ve been ripped off..
Thank you for your input. I will definitely look more into it and possibly, most likely, close my accounts with NWM.
100% cancel right now.
Have you deposited any money to your Roth IRA with NwM? If so, just contact Vanguard, Fidelity, or Schwab and open a new one and tell them you have one to transfer over. They will help you move your NwM to them.
If not, then just close your NwM IRA and open one at the above.
I just sent them an email terminating my services with them. I already have a ROTH IRA managed by NWM, trying to see if I can have full access to it. Also, cancel my whole life insurance with them.
You don’t need to contact NWM. Just setup a Roth account at a discount brokerage, and initiate a Full Account Transfer. You will need to provide a NWM statement with the transfer form.
However you will need to contact them to cancel the whole life policy. You won’t get any money back from your premiums paid. Consider these premium $s paid as a stupid tax. You won’t make this mistake again.
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