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Over the course of an investor’s life, mutual fund fees can end up costing the average Canadian household $323,654.50, says digital wealth manager Nest Wealth.

“Put in context, the average Canadian household will spend $80,000 more on investment fees than they’ll spend to raise their child to the age of 18,” says Randy Cass, founder and CEO of Nest Wealth.

Read: CRM2 is here. Are you ready?

Nest calculated the fee by assuming an investor who starts saving at age 25 with a $10,000 initial investment. Each year for the next 39 years, she adds $5,800 to her investments. At age 65, she starts withdrawing either $22,000 a year, or 3.5%, whichever is greater. Nest presumed a rate of return of 6.5% and used a 2.35% annual fund fee. Morningstar data shows 2.35% is the average equity mutual fund MER in Canada.With those rates, the average balance of the investor’s account over the investment lifetime is $229,000, while the fees she pays are $323,654.50.

Nest Wealth has a Canadian fund fee calculator investors can use to see how their fees affect their savings by translating a MER into into a dollar figure.The fees have been compiled by Fundata, and they include Canadian funds that have been open for at least a year. If you look up multiple funds at once, the calculator will tally total fees across investments.

The tool makes it easy to quickly look up competitors’ fees — something that may come in handy as more of your statements include dollar figures to comply with CRM2.

Also read:

Yet another ETF player starts trading

Canadians lack fee awareness ahead of CRM2

Originally published on Advisor.ca
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