In a world of lower returns, one way to ensure that you are keeping the growth that you do get, is to take a close look at what that growth is costing you.
If you are paying on a per transaction basis, best do the math to make sure there is not a better way.
If you are buying DSC mutual funds, best look into the MER's (Management Expense Ratio's) and penalties for selling to see what the fund company is charging you.
"Fee-based" is the direction that many advisors have been taking recently: usually you pay a % of the assets that the advisor has "under administration".
This makes sense if you are getting good advice:
However and where you need to be attentive:
Vanguard’s ETF-mutual funds comparison started with an advice fee of 1.25 per cent, which is on the low side if you don’t have an account that is well into six figures. The company’s own research on costs in fee-based accounts shows a range of well below 1 per cent for very large accounts to 2 per cent for accounts on the small side.
On top of that advice fee is an average management expense ratio of 1.36 per cent for F-class mutual funds. Once again, just to be clear, F-class funds are cheaper than regular mutual funds because they have embedded compensation for advisers (trailing commissions) removed. These commissions are redundant in a fee-based account, where you pay your adviser directly.
It can be a difference maker!
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist