You and Your Advisor Part 2/3 – Fees

By , On , In General

There are only a few real models in the industry. There are more but they are spin offs of the below so here is a basic structures:

  • Embedded Mutual Fund style fee or MER (Management expense ratio)
    • Typical fee (MER) in bank or mutual fund sales people is around 1.7%-2.1% (Seg Funds are likely near 3% fee)
    • This fee covers the investment management and the advisor depending on his/her dealer split, gets approx. 1%

 

  • Fee based management
    • This is $ dollar transparent and a % charged on your account value
    • Typical accounts are greater than $500,000 and depending on the size of the account, fees are 0.75%-1.75%
    • This fee covers the investment management and the advisor depending on his/her dealer gets approx. 0.25%-1%

 

  • Straight Fee for Advice
    • This is a hourly fee for some sort of advice or value
    • Typical hourly is between $150-$250 per hour
    • Sometimes it is offered on a project basis (example $5,000 for a retirement plan)

To have a more meaningful conversation with you advisor here are 5 Questions Every client has to ask their advisor ->

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