Breaking down investment fees

TIPS: IT'S CRUCIAL TO UNDERSTAND WHAT YOU ARE PAYING

- Johann Rossouw

Fees. The F word that strikes fear in the heart of any investor. We work hard to save money for investing purposes, and our goal is to see our capital grow.

So if the subject of fees hasn't come up with your advisor, avoid bad habits by unpacking it until you are satisfied with the answers.

Ask the right questions

Are you aware of how much you are currently paying for your investments?

Are you receiving value for money?

What is the impact of fees on your investment portfolio over the long term?

And why is the salesman who sold you an old-generation retirement annuity (RA) 30 years ago driving a Ferrari while you need to work until age 70?

Broadly speaking, there are three types of fees charged within investments:

1. Investment management;

2. Administration; and

3. Financial planning.

Investment management fees This is the fee paid to the investment manager of the fund you are invested in.