The Goldman Fleece

Golden Fleece pub, originally uploaded by twm1340.

Via a private Twitter message (Thanks!), the Consumerist has offers words of wisdom to nonprofits with investment assets:

A Goldman Sachs trader recently told me that he constantly rips off endowments, charities, and foundations when they would call up and want to invest. "Whenever I hear it's a non-prof, then you just ladle on the extra fees," he told me.

That's because he knew they were usually unsophisticated investors and wouldn't do comparison shopping or know how to properly analyze a fee schedule. He justified it by saying it was, "their fault... when you only call up one place, what do you expect?"

To some extent he's right. If you don't shop around for your investments or learn to how to make sure you're getting the best deal, you do set yourself up to be taken advantage of. If you're getting into an actively managed fund, you better learn all about fees, loads, 12b1 fees, marketing fees, transaction fees, all the fees in the fee rainbow. Don't think that because you're a non-profit all of a sudden everyone puts on their happy hats and kid gloves and is going to help you out.