Lower Investment Fees Are a Good Thing

Vanguard clients investing at least $10,000 in some similar funds saw their expense ratios fall today to 0.07 percent from 0.15 percent. Previously, the fee applied only to Vanguard investors with at least $100,000 in a fund.  http://www.investmentnews.com/article/20101007/FREE/101009909

When a company has billions of dollars under management, you have scale.   Why would a company need to charge one percent or more to manage those pooled dollars with that type of scale like many mutual fund companies do?

I have asked this question over and over when I used to meet with wholesalers.

Costs are a certainty.  Performance is not.  We can control what we spend.

When a person spends money with an advisor, they should pay for meaningful personal advice and this may cost a few dollars. Paying a lot for investments does not count as meaningful advice to me.

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About Christopher Hessenflow

Christopher Hessenflow is a financial planner in the Chicago area. He works with all sorts of people who are much more interesting than he is. He enjoys his career which lends him time to think and, sometimes, be creative. Chip was born bald.
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