While the word “fee” may seem like a pretty obvious term in that it means the same across many different realms, it can take on a whole new meaning in the world of investments.
Regardless of the kind of investment, there is almost always some type of fee involved.
“Many people make decisions regarding their entire portfolio based solely around the fees involved” explains Richard Meyer Cayne of Meyer International in Bangkok, Thailand. “There is so much more to it than just that though”.
There are basically two types of fees
Within your portfolio, it’s likely that you will be dealing with both ongoing fees and transactional fees. Transactional fees are precisely what they sound like- fees paid out for a transaction. Every time you buy, sell or exchange in certain financial institutions, they will be making their profit off these fees.
Other financial institutions charge ongoing fees for advisory services and operating expenses. Because financial professions have to make a living too, their services are generally offered with either ongoing fees or transactional fees attached.
As you may have surmised though, there are many investment options that come with charges that include a combination of both ongoing and transactional fees.
The percentages they charge generally range from somewhere between 0.25% up to 5% (though sometimes less). While this certainly seems like a miniscule amount, those smaller amounts definitely add up in the long-term.
It’s important that you consider the fees being charged against the overall value of the service being provided.
Even when there’s no fees, there are fees
Many will advertise that they offer no-load funds. That means that an investor can buy or sell without any sales fees attached.
In certain instances, maintenance fees may be applicable, and to keep not charging these fees realistic, there are certain restrictions and limitations on the kind of an investment that can be made, which is something of a fee in and of its own. While certain platforms do not charge commissions on investments, you may or may not be sacrificing the advice and quality of research that comes with those platforms that do.
So, is missing out on an investment opportunity due to not being informed properly worth the cost of not paying a fee? While some might say yes, the most likely answer for many is a resounding no.
“Don’t let fee structures obstruct a suitable, more attractive investment option, even if the better choice initially seems to be the option of a lower fee” explains Richard Meyer Cayne. “Any worthy consultant or financial advisor should definitely be able to clarify and explain any fees in a clear and simple fashion”.
After all, that’s what financial consultants do. They help investors make wise and informed decisions.
Furthermore, if an advisor charges no fee, they are usually receiving fees from their investment house. The investment house takes these fees, in most cases, from the account of the client (whether an intermediary is involved or not), so it is generally more enticing to the client to receive the extra service with the intermediary operating in between.
At no additional cost to the client, it provides a certain degree of added value. We help our clients get the best deal by helping them to negotiate fees down for larger volumes or larger sums that we introduce to the investment house.
When dealing with fees, it’s always best to first consult with a trusted financial advisor like Richard Meyer Cayne.
Richard Meyer Cayne
Richard Meyer Cayne of Asia Wealth Group Holdings, the Meyer Group, Meyer Asset Management and Meyer International Ltd has been involved in wealth management planning for decades. Originally born in Montreal Quebec, Canada, he later relocated to Tokyo, Japan for over 15 years and now resides in Bangkok, Thailand. While he runs the Meyer Group and serves as the high credibility CEO of Asia Wealth Group Holdings Ltd, a London, UK Stock Exchange-listed Financial Holdings Company, as well as the Managing Director of the Meyer Group of Companies www.meyerjapan.com. and has additionally been the managing director of multiple organizations that specialize in helping high net worth individuals with succession planning .
Having worked with clients all over the globe with everything from portfolios to bonds to mutual funds to offshore investing to investing in retirement for your golden years, Richard Cayne of Meyer International can help you invest the right way and protect your cash. Richard has been a financial advisor involved in wealth management planning solutions and asset management in Asia for over 25 years and while living in Tokyo, Japan, he assisted many high net-worth Japanese families create innovative international tax and wealth management planning
