Download Breaking free of investing costs

Breaking free of investing costs
There are many different investment options available to help you reach your
financial goals. It is important to understand the costs involved and how those costs
impact your investments. Not all investments have the same fee structure and some
may affect your return more than others.
“When it comes to your investments, it is important to be aware of the associated
costs,” said Jason Round, head, Financial Planning Support RBC Financial Planning.
“The less you pay for your investments, the more you keep, making the cost of investing
something you should try to minimize.”
When thinking of mutual funds, Round highlights three costs to look for:



Management Expense Ratio (MER) – This is the total of the management fee,
administration fee and GST/HST charged to a mutual fund each year. All mutual
funds have an MER.
Sales commissions – Some mutual funds charge a ‘load’, or one-time fee paid
to an advisors’ firm for selling a mutual fund. The load might be charged when
you buy the fund, or when you sell it. Most mutual funds offered by banks do not
have load charges.
Short-term trading fees – Mutual funds intended for long-term investing
typically charge fees if units are redeemed within a short time period (e.g. 30
days). The proceeds of this fee go directly to the fund, benefiting the remaining
unit holders. The fee is designed to deter excessive trading and offset the
associated costs.
“We encourage clients to ask questions about exit fees, disclosure, total costs of
ownership, fees for financial planning services and commissions – the more you know,
the better informed you will be about your investments,” added Round.
For more information, visit http://www.rbcroyalbank.com/products/mutualfunds/index.html
Word count: 281