{"id":5926,"date":"2015-06-01T07:05:46","date_gmt":"2015-06-01T14:05:46","guid":{"rendered":"http:\/\/blog.paladinregistry.com\/?p=5926"},"modified":"2024-04-09T06:44:45","modified_gmt":"2024-04-09T10:44:45","slug":"how-investment-advisor-fees-add-up","status":"publish","type":"post","link":"https:\/\/www.paladinregistry.com\/blog\/investing\/how-investment-advisor-fees-add-up\/","title":{"rendered":"How Investment Advisor Fees Add Up"},"content":{"rendered":"\n

In the pursuit of an investment advisor or investment manager one of the most important (and unfortunately complicated) pieces of information to obtain is their complete fee structure. As many see future investment returns more muted the level of total fees will become more important. After all, in a well-diversified balanced portfolio in the past century an 8% gross return was not unreasonable. Going forward a 5-6% gross return seems more likely. This being the case, a 2% total fee on an 8% gross return might be palatable (fee represents ~25% of gross return), but the 2% total fee on a 5% return is not (fee is 40% of return).<\/p>\n\n\n\n

Before we get into the fee discussion it is also important to distinguish between the two types of investment advisors; as their fees, incentives, and duties to the client can differ significantly.<\/span><\/a><\/span><\/strong><\/p>\n\n\n\n

  1. Fee-only (independent) advisors make no compensation from fund or other investment companies with their only compensation coming via a flat fee charged to the client.<\/li>
  2. Other advisors (brokers or wire-house advisors) can make money in many ways (management fees, compensation from fund\/investment companies, commissions, etc.).<\/li><\/ol>\n\n\n\n

    Here are all the investment advisor management fees you need to understand.<\/p>\n\n\n\n

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    Table of Contents<\/p>\n