Cost Matters

A small fee difference compounded over time can add up to an astonishing amount of money.


How much can costs add up to?

All scenarios start with $500K and have an average return of 8% , but by paying less, it equates to much more money in your investment account.

Most investors have no idea what they are paying in fees. In fact according to Credo Consulting Inc., 62% of Canadian investors believe they pay zero for investment management. Often costs are not disclosed at all or are embedded (hidden), but we can tell you this, once all the embedded costs have been account for, you will likely be paying between 2-3% per year! This is 1.5 to 2% too high.

 

1.5 to 2% might not seem like a large number, but that number on your investments compounded over time, adds to a lot of money! How much money, just see the charts to the left and right. If Canadians all knew this impact, 100% would know they pay fees and they'd tell you exactly how much.

 


 

This commentary is based on information that is believed to be accurate at the time of writing, and is subject to change. All opinions and estimates contained in this report constitute RBC Dominion Securities Inc.'s judgment as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. Interest rates, market conditions and other investment factors are subject to change. Past performance may not be repeated. The information provided is intended only to illustrate certain historical returns and is not intended to reflect future values or returns.