Quote:
Originally Posted by Boomer
Thanks, manaboutown and Caymus,
I have the top ten holdings of funds in my friend's advisor's report, but I want to take a scalpel to those to dissect them for as much as I can find out about the fees. An earlier search gave me only partial information for some and others I could not find at all. I probably didn't try hard enough.
I have done this throughout the years -- for my own info as manager of the Boomer Fund  -- by using those sources you mentioned, but I will take another look. (I used to sometimes copy Will Danoff's homework by looking at Contrafund's top ten holdings.)
I must sound like a woman obsessed. I have to find out what's inside those mutual funds in fees. The AUM is the easy part. But are the internal fees fair fees? I also wonder if incentives come in other forms, not exactly commissions.
Maybe I should take up crafts or day-drinkin' instead of delving into mutual fund costs............yeah, right, like that's gonna happen.
Boomer |
Boomer, you are a friend indeed to a friend in need and have a lot of digging ahead of you to discover deeply buried and obscured costs followed by analysis thereof to get to the bottom of how much her current "financial advisor" is actually costing her.
As I understand it her portfolio is at one firm, she uses a single "financial advisor" (stock bookie to me) to whom she pays an AUM, and her portfolio contains several, possibly numerous, actively managed mutual funds. It may also contain some index funds.
A second brief search came up with a government website which in simple laymen's terms lists and describes fees which mutual funds charge. According to the website a fund's prospectus reveals the fees it charges. That means to me one would have to obtain a prospectus of each mutual fund in her portfolio and investigate its fees and other expenses.
"Mutual Fund Fees and Expenses
As with any business, running a mutual fund involves costs. For example, there are costs incurred in connection with particular investor transactions, such as investor purchases, exchanges, and redemptions. There are also regular fund operating costs that are not necessarily associated with any particular investor transaction, such as investment advisory fees, marketing and distribution expenses, brokerage fees, and custodial, transfer agency, legal, and accountants’ fees.
Some funds cover the costs associated with an individual investor’s transactions and account by imposing fees and charges directly on the investor at the time of the transactions (or periodically with respect to account fees). These fees and charges are identified in the fee table, located near the front of a fund’s prospectus, under the heading "Shareholder Fees."
Funds typically pay their regular and recurring, fund-wide operating expenses out of fund assets, rather than by imposing separate fees and charges directly on investors. (Keep in mind, however, that because these expenses are paid out of fund assets, investors are paying them indirectly.) These expenses are identified in the fee table in the fund’s prospectus under the heading "Annual Fund Operating Expenses."
In the fee table, under the heading of "Shareholder Fees," you will find:
Sales Loads (including Sales Charge (Load) on Purchases and Deferred Sales Charge (Load))
Redemption Fee
Exchange Fee
Account Fee
Purchase Fee
In the fee table, under the heading of "Annual Fund Operating Expenses," you will find:
Management Fees
Distribution [and/or Service] (12b-1) Fees
Other Expenses
Total Annual Fund Operating Expenses"
From:
https://www.investor.gov/introductio...on%20investors.
It may be possible that her broker can charge her commissions/fees on her trades and other matters as well as getting paid the AUM. That thought makes me cringe. One would need to read her engagement contract to find out.
"Not all fees come packaged under the same umbrella. You may see the following under your brokerage contract or regular statements:
Annual fees
Research fees (for investment data)
Inactivity fees (if you aren't trading regularly)
Fund fees
Account fees
Assets under management (AUM) fees"
From:
How Brokerage Fees Work