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Financial Happenings Blog
Friday, November 02 2012

I follow the Humble Savers twitter feed to keep abreast of what is being discussed about financial planning services.  A recent article – Financial Adviser Fees – the Cold Hard Facts - puts into question the fees being charged on investment portfolios suggesting that ongoing fees for a $200,000 investment portfolio could be 2.55% of the value of a portfolio with establishment fees of  $4,500.

I don’t doubt that this is a reasonably common fee structure in the market place but not all advisers are charging so extravagantly.

So what are the fees at A Clear Direction?

I have looked at an all share based portfolio.

Establishment fees would be in the order of :

 Plan Fee - $1,100  (may be more if there are other complex aspects to consider)

Investment fund buy/sell spread - $275

Administration Service transaction costs - $105

Total - $1,480

This is $3,000 less than the article suggests you might be paying.

Ongoing adviser fees would be in the order of: 

Adviser Fees - $1,100   (0.55%)

Investment fund fees - $750   (0.37%)

Administration Service fees - $525   (0.26%)

Total - $2,375   (1.19%)

These are less than half of the proposed fees in the Humble Savers article.

We at A Clear Direction are totally conscious of the fact that higher fees burden the long term returns promised by portfolios and have worked hard to drive down the costs of doing business through removing unnecessary administrative costs of doing business, providing a sophisticated investment approach which realises keeping costs low is important and sourcing high quality administrative services at the lowest cost available for clients.

The costs to set up, administer, monitor and review an investment portfolio does not have to be outrageous and can allow you to focus on what’s important in your own life rather than having to worry about your financial planning.


Posted by: Scott Keefer AT 07:00 am   |  Permalink   |  Email
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