That’s great that you found the information interesting, and of value I hope.

The fee of 1.25% needs to be assessed against what services you need and what is being provided. The first question to ask yourself is, what services do I need? If it’s management of your investments only, then talk to two or three investment managers and compare their services with their fee. For instance, do they provide quarterly performance reports? Who custodies (holds) your money? In my opinion, it’s better to have another firm custody your assets. Then you receive a report from that firm which you can compare to the advisors reports. A nice cross check. 1% to 1.25% is a typical range for firms that use actively managed mutual funds or individual stocks and bonds. In addition to the management fee you are paying the expenses inside the mutual funds and transaction costs. Total feels ratchet up fast and make it more difficult to grow your portfolio. Ask about those other fees, as well. It’s your money so never hesitate to have a firm show you total expenses, e.g. management fees plus mutual fund internal expenses, and what you will be paying for transactions, either for mutual funds or for individual securities.

If the firm is both managing your money and other aspects of your financial life, they may charge an ongoing 1.25% for intermittent financial advice. You may be better off with a lower management fee from a firm that specializes in investments, and paying separate for specific financial advice from a firm that specializes in financial planning. Financial planners aren’t necessarily highly knowledgeable in investments, and visa versa. Check experience and credentials.

For comparison, and a plug for my firm, we charge .5% (1/2 of 1%) annually for a $1 million portfolio. Low cost, tax efficient funds are used to build the investment portfolios. The entire portfolio management fee for a $1million portfolio plus fund expenses may be 1% or less. We custoday our assts with a firm that has low transaction fees.

We charge a minimum fee of $500/qtr. To keep the annual fee less than .7%, we suggest households with less than $285,000 use our hourly services.

Quality of management, which includes portfolio management knowledge and experience, coupled with lower costs are both very important for growing your assets. Too often people are nervous about asking questions, likely concerned they will insult an advisor. If an advisor gets upset, move on. Good communication and forthright information are signs of an advisor who respects the advisor/client relationship.

Thanks for reading the blog.

Best of luck.
Rita Janaky

Warm wishes,
Rita

The site looks good, and I LOVE the Intelligent Woman story! What a great tribute to your mom, and a great lead in for women interested in managing their finances.