No, there are no fees with my mutual funds.
No, the mutual fund company pays my advisor.
Not thinking it through. Why would the mutual fund company pay your advisor with anything but your own money?
My mutual funds used to be free, but my latest statement has a bunch of new fees.
Not realizing that the fees were always there.
Yes, but it’s just 2% or so.
Not understanding that the fees compound to big money. Might think that the 2% applies just to returns rather than the full amount of your savings every year.
Yes. I thought the fees were small, but my latest statement shows they’re much more than I thought.
Seeing the amount in dollars has much more meaning for most people than percentages. I’d like investors to see the dollar cost of the mutual fund’s entire MER, but showing advisor compensation is a start.
Yes, but you have to spend money to make money.
That’s an expression that applies in many areas, but not investing. All the evidence says that professional money managers very rarely earn excess returns that make up for all the costs investors pay.
Yes, but what choice is there but to pay the high fees?
Understands that fees are high, but isn’t aware of lower cost options.
Yes, but I keep fees to a minimum.
Has found a low cost approach. There are a number of possibilities here:
- A low cost mutual fund company that offers some advice directly instead of paying commissions to advisors.
- One of the new breed of advisors who keep costs low.
- Do-it-yourself approach.
I’ve encountered people at each point in this spectrum of answers. Are there any other common answers to this question about fees?