
Subscribe to our newsletter to receive exclusive content on personal finance
[sibwp_form id=1]
Don't let fees eat up your investments! Our Investment Fees Calculator can help you see the real cost of all those fees.
Would you like to get this calculator on your website ?
The concept of investment fees is often overlooked – particularly by investing beginners. However, just like taxes and currency exchange differences, investment fees can be detrimental to portfolio returns if not managed carefully. The Hardbacon Investment Fees Calculator was developed with a vision to help investors make more informed decisions when it came to the purchase and management of assets such as stocks and bonds. Through the calculator, investors can:
In Canada, there are several ways that investors can access the markets they want. It is important to remember that not all of these are created equal. Some channels are more expensive than others. Generally, robo-advisors charge a lower rate to buy assets such as mutual funds than a professional financial advisor. However, for a novice, the human touch and advice provided by an advisor that helps them make optimal financial decisions may justify the incremental fees paid. The below list provides a range for the investment fees charged by each platform in Canada:
The Hardbacon Investment Fees Calculator is designed to be user-friendly and flexible for all users to assess the true value of their investments post the payment of relevant fees. To use this investment fee comparison calculator, users need to input a few variables and the calculator completes the rest of the calculation automatically. These inputs include:
Once you have input all the variables you need to on the left side of the screen, the results regarding the impact of fees on your investment returns should be available for you to view on the right side. In total, you should see four numbers. The significance of each of these numbers is explained further below:
o $10 for the first year (when the portfolio is worth $1,000)
o $11 for the second year (when the portfolio is worth $1,100)
o And so on…
While the aim of the calculator is to be as user-friendly as possible, it is vital that the inputs are as accurate as possible to obtain a reliable output. To help users understand what each input means and where they can find the right information, we have developed the below:
Generally, management fees are calculated as a percentage of the total assets entrusted to the investment manager (known as “assets under management” or “AUM”). For example, if an investor places $100,000 with a manager who charges a 1% fee, that investor will end up paying the manager $1,000 in the first year.
Investment fees are the fees paid to the investment professionals that help them cover their expenses such as the costs of trading, advisory services, or other administrative costs that they may incur such as the salaries, wages, bonuses, etc. that they pay their staff.
According to directives by the Canada Revenue Agency (CRA), any transaction fees used to buy or sell investments such as sales charges or commissions are not tax-deductible. However, investment fees paid to a person whose primary business is advising others on whether or not to buy or sell securities or whose primary business involves the management or administration of securities are tax-deductible.
No. When you look at a higher investment fee, don’t immediately discount it. There may be a valid reason for why a particular advisor or broker is charging a higher fee. This reason may be that they provide services that their competitors don’t or the fact that they include certain fees that their competitors haven’t included in their pricing. Read marketing materials and contracts carefully to understand exactly what you are getting into.
Subscribe to our free newsletter and receive personal finance content every week