Funds and Fees


Nobody likes to be blindsided period, but certainly not when it comes to your money and finances.  If you have investments and look at your statements when you receive them, you may believe you have a pretty good handle on the fees you are paying. Now ask yourself, do you really? Can you answer that question with absolute certainty that you know exactly what you are being charged on your mutual funds?

When you go to the supermarket and you go to the front of the store to check out, you can probably guess within a few percentage points of what your groceries are going to cost that week.  But it is not always so easy to discern what you are paying for your mutual funds.

Here are some examples that you may or may not know:

12B-1 Fee – Which is a marketing fee you are paying to have managers promote a fund.

Other Distribution Fees-The cost of advertising the fund as well as the print costs.  This is a mind-blowing fee to me.  So, when you see the big Super Bowl ads or hear the jingles on the radio, guess who is paying for that cost?  The investment company itself you might guess?  Wrong, the shareholders!

Operating expense ratio– The fee that is charged by the money manager for the picking of securities and administration of the fund.

Trading Costs-All of the fees associated with the buying and selling of the underlying securities held by the funds.  And if you have a mutual fund with high turnover, these fees can add up.  Some mutual funds at year end don’t even own any of the same securities that they held at the beginning of the year.

Read your prospectus or make an appointment with a financial advisor and have them show you where these fees can be hidden and answer any questions you have about them. Being informed about this particular topic can better help you manage the unknown.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and are not affiliated companies. 347764

A.Viola & J. Beyer 10/31/19

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