Implications of "Best Interest" Rule for Annuities
Aaron Levitt
|
With broker-dealers and agents now acting in favor of clients, investors may be...
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Paying fees on your investments is nothing new. No one is immune from it – even high-net-worth individuals will pay fees on their investments (albeit at a sometimes smaller rate than most). However, investors with fewer assets who are more likely to invest in mutual funds (rather than work with a stock broker, for example) often pay high management fees on their investments.
This math alone should give investors pause to look at the management fees for each of their investments and see if alternate investments can be acquired at a reduced cost.
According to a Wall Street Journal article, investors can choose a more “bare bones” approach, with financial advisors doing less “handholding” and only providing the basics for their clients. These types of plans can include household budgets, projections of retirement needs, and a model portfolio of stocks and bonds. The money management side of it is either done by the investor themselves or through other intermediaries at a reduced price.
Also, sales loads or front-ended loads are often added to the purchase of a mutual fund, acting as a one-time commission paid directly to the broker who sold you the investments. These can also be quite high (sometimes beyond 5.0% or higher according to RBC Global Asset Management) and will make a large dent in your initial investment.
For example, international funds or other funds that don’t invest in all blue-chip companies might charge a larger expense ratio than a fund investing in known companies. Also, an index fund, which simply attempts to mirror the market, will be cheaper than a more actively managed fund in which stocks are cherry-picked based on the chosen strategy.
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Aaron Levitt
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Check out the latest edition of mutual fund scorecard.
Find out why $30 trillon is invested in mutual funds.
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Find out why $30 trillon is invested in mutual funds.
Download our free report
Find out why $30 trillon is invested in mutual funds.
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Paying fees on your investments is nothing new. No one is immune from it – even high-net-worth individuals will pay fees on their investments (albeit at a sometimes smaller rate than most). However, investors with fewer assets who are more likely to invest in mutual funds (rather than work with a stock broker, for example) often pay high management fees on their investments.
This math alone should give investors pause to look at the management fees for each of their investments and see if alternate investments can be acquired at a reduced cost.
According to a Wall Street Journal article, investors can choose a more “bare bones” approach, with financial advisors doing less “handholding” and only providing the basics for their clients. These types of plans can include household budgets, projections of retirement needs, and a model portfolio of stocks and bonds. The money management side of it is either done by the investor themselves or through other intermediaries at a reduced price.
Also, sales loads or front-ended loads are often added to the purchase of a mutual fund, acting as a one-time commission paid directly to the broker who sold you the investments. These can also be quite high (sometimes beyond 5.0% or higher according to RBC Global Asset Management) and will make a large dent in your initial investment.
For example, international funds or other funds that don’t invest in all blue-chip companies might charge a larger expense ratio than a fund investing in known companies. Also, an index fund, which simply attempts to mirror the market, will be cheaper than a more actively managed fund in which stocks are cherry-picked based on the chosen strategy.
Receive email updates about best performers, news, CE accredited webcasts and more.
Aaron Levitt
|
With broker-dealers and agents now acting in favor of clients, investors may be...
Justin Kuepper
|
Let’s take a look at what sets China apart from other emerging markets,...
News
Iuri Struta
|
Check out the latest edition of mutual fund scorecard.
Find out why $30 trillon is invested in mutual funds.
Download our free report
Find out why $30 trillon is invested in mutual funds.
Download our free report
Find out why $30 trillon is invested in mutual funds.
Mutual Fund Education
Justin Kuepper
|
Let's take a closer look at how ESG investments have outperformed during the...
Mutual Fund Education
Daniel Cross
|
While CITs and mutual funds share many similarities, there are some key differences...
Mutual Fund Education
Sam Bourgi
|
The phrase ‘bear market’ has been thrown around a lot lately, but it...