Quick Tips

Rate of Return is how much you expect to earn on your investments over time, written as a percentage of your current investment amount. You can input your estimated rate of return, or use our default of 5.25% per year.

Fund Fees are the amount you pay to own a particular mutual fund or exchange-traded fund (ETF). Fund fees range from 0.05% to 2.0% per year. To find your fund fee, enter your fund’s Ticker Symbol into Google, and look for the Expense Ratio. The Expense Ratio is your fund fee.

Advisor Fees are fees you pay to your financial planner, advisor, or broker-dealer to handle your accounts. Advisor fees are typically shown as a percentage (usually called Assets Under Management, or AUM) and average around 1% per year.

The True Cost of Fees

Lowering fees could be one of the most important investing decisions you make. Whether they are classified as...

The True Cost of Fees

Lowering fees could be one of the most important investing decisions you make. Whether they are classified as high, standard, or average, fees impact your investment income. Fees draw money from your account regardless of your investment activity. If you make a profit, fees are drawn from your account. If you make zero profits, fees are drawn from your account. If you hit a loss, fees are drawn from your account. Fees are often taken as a percentage of your investments. Because they are not usually presented in dollars and are automatically withdrawn from your account, fees are easily overlooked. The higher the fee, the less money you’ll make over time.

Every time fees are withdrawn from your investment dollars; you don’t just lose money from paying the fees – there’s also an opportunity cost. You lose out on the opportunity of making additional profits from your total investments had those dollars stayed in your account. If those fee dollars were still in your total investment amount instead of being paid to your advisor or mutual fund, you would have made significantly more profit throughout your investing years.

Rate of Return is how much you expect to earn on your investments over time, written as a percentage of your current investment amount. Because you can’t predict the future, you can make a best guess either based on your past rate of return, or use one of many rate of return calculators available online. We automatically adjust your rate of return for inflation, and default your rate of return to 5.25%, which you can change.

Fund Fees are the amount you pay to own a particular mutual fund or exchange-traded fund (ETF). Fund fees range from 0.05% to 2.0% per year. These fees are deducted from your investment returns, usually quarterly, to cover the administrative cost of managing the fund. To find your fund fee, enter your fund’s Ticker Symbol into Google, and look for the Expense Ratio, which is your fund fee.

Advisor Fees are fees you pay to your financial planner, advisor, or broker-dealer to handle your accounts. Advisor fees are typically shown as a percentage (usually called Assets Under Management, or AUM) and average around 1% per year. If there is a person that you call about your investment accounts, it is likely you are paying this fee. Call your contact and ask them for details on the fees you pay. They may not make it easy for you. Or search online for “[your financial institution] advisor fee”.