Whether investors know it or not, their asset manager may well be ripping them off. Though fees charged on unit trust investments need not be complicated or high, too often they are both. And these charges are eating away at people’s investment returns.If an investment is earning an after-inflation return of 6%/year and costs 1% in fees, the investor is losing 17% of that return (1% divided by 6% or 1% of 6%) each year to fees. This compounds over time, eroding investment returns. (All fees quoted in this article exclude Vat.)"The [investment] industry is structured in a way that is disempowering and confusing, and pushes people into a very expensive model," says Steven Nathan, CEO of 10X Investments."Always ask yourself: who is charging me this fee, for what service, and how am I paying for it?" Nathan says."Any discussion about fees must be held in the context of returns. Get the 6% real return at the lowest cost."Unit trusts generally have three major categories of fees: platform...
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