|
|
 |
Managed account fees
If you invest in a managed account through a fee-based
adviser, your annual fee is calculated as a percentage of your
account value.
With some advisers, the fee covers all the managed
account transactions, your trading in individual securities, and
your consultations with your adviser and manager. However, other
fee-based accounts cap the number of trades and charge a discounted
commission thereafter.
The terms depend not only on the brokerage firm
or investment company your adviser is affiliated with, but to
a great extent on how much money you're investing. As a
general rule, the larger the amount, the better the rate you can
negotiate. This is comparable to the role that
breakpoints
play in mutual fund transactions.
Wrap fees on mutual fund managed accounts are
usually between 1% and 2% of assets on top of the management and
trading fees that the individual funds within the account charge.
This means the overall cost for this type of account, after the
expense ratios are figured in, may be higher than for other managed
accounts. One reason is that the accounts themselves tend to be
smaller, so financial advisers are less likely to discount their
fees.
|
|
|
|
|
