Investment Fee Quiz

THINK AGAIN

All investments come at a cost. Often it’s built into the products you buy. Or you may pay a commission to your advisor for each trade. Fees can also be a percentage of the amount you have invested. Even if you invest through a discount broker, you may be paying more than just the basic transaction fee.

WE DISAGREE

Fees matter, plain and simple. Whether your investments are performing well or poorly, even a small difference in fees can make a big difference to the size of your portfolio over time. Make a habit of asking your investment advisor about the fees you pay for each investment.

NOT SO

It’s important to know the true cost of the products you buy and the services you receive. Paying a 3% rather than a 2% fee on your $20,000 investment could reduce your return by more than $6,000 over 20 years, assuming a 5% return.

FALSE

Higher fees are no guarantee of higher returns. Since the fees you pay can eat away at your investment returns, it’s important to know that lower fee options often exist, even among very similar products.

NOT ANYMORE

New securities laws mean investment firms must provide you with a detailed annual report about the fees you pay to the firm each year. Ask your investment advisor when you will receive your Charges and Compensation Report and about the fees you pay, both directly and indirectly.

NOT ALWAYS

Yes, your advisor’s firm sets the fees for the services you receive. And investment product providers set the fees for the products you buy. But you have choices about the investments you choose and the fees you pay. Some fees may be negotiable. Always ask your investment advisor if there’s a lower fee option that’s right for you.

YOU ANSWERED FALSE, BUT GUESS WHAT? IT’S TRUE

Fees are a part of investing and you pay them even if your investments are performing poorly, or losing money. You can’t avoid paying investment fees, but it’s important to learn about the choices you have so that the fees you pay won’t unduly diminish your portfolio returns.