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106 Things We Do For Clients, No. 45

No. 45 of 106 Things We Do For Clients

Provide access to low-cost institutional mutual fund shares.

Most investors don’t know that those investing significant sums of money (usually over $1 million per fund) get a significant reduction in the fees they pay to the fund manager. Because it’s usually large private and public intuitions that have such large sums of money to meet the minimum investment, these are called institutional shares. Most investment advisors who don’t receive commissions and are advice-only have special access to institutional shares through their custodian. This can amount to thousands upon thousands of dollars of savings over the life of your investments. For example, you will pay an average annual charge to a mutual fund manager of 1.25% when you use a commission or fee-based (fee and commission) advisor. That charge can drop 50% to 90% when you use an advisor that charges a fee for advice.

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