|
|
| *Ostroff, Fair and Company>>>Investing |
What is a reasonable fee for a broker to charge? |
My Mom has a roll-over IRA and wants to hire someone to manage it. He does not work on commission and his fees are 1% for the first million, .75% for the next million, and .50% for each million thereafter. What is the industry standard for brokers' fees? Is 1% high, low, or average? Why not do it yourself for your mother? Nobody is going to watch and invest your money any better than you. A 1% managment fee is not bad if that's all they charge, but 1% of a million is 10K. By the time it's all said and done, with managment fees, broker fees, mutual fund fees, you'd be very lucky to get by with 2%. Couldn't you spend 10 hours per month and decide which funds to invest in? Isn't you're time worth $200-300 per hour? /// Overall it appears a fair price... be sure to ask what she is paying for as that will make all the difference.. will the do her taxes? will they write or manage a trust for her if she is unable? Do they actively manage the account or is this just an umbrella fee for her to manage the account?... if any extra services are included then it is a fair price.... If She is approaching the 1million mark and they only invest and monitor the assets then that is a little high and she should be able to negotiate it lower... but it is dependant on services provided... Dont be shy to shop around... a lot of brokers have time to sit and compare fees to win an account of decent size. Muncie below makes some very good points... but dont worry about the no-load part... just ensure that your not responsible for the Load if purchased in the account.... every management account i am familiar with uses loaded funds but they dont actually charge you the fee.... they "buy A shares @ NAV" ,,, this opens up the investment options to the advisor. Your first responder gave you a real good answer. You do need to find out what is included in the 1% fee. That fee is pretty standard, but depending on what you get for the fee, it can either be a bargan or darn near theft. I one time had a stock broker offer to manage my assets for 1%. When I asked him what his investment plan was, he told me he would invest the money in mutual funds. Now here is the good part. He also gets about 5% from the mutual fund on investments. That was in my opinion outright theft. I declined his offer. Here are a couple of questions to ask. 1. what do you plan to invest the assets in? 2. If mutual funds, which ones? Are they no load funds? 3. What kind of a return can I expect over say a 5 year period? 4. Do you pay the brokerage fees on transactions or do they come out of the assets? 5. Give me five references of people whose assets you have managed for 5 years or longer. Then call them and ask them pointed questions. |
| Tags |
| Renting & Real Estate Personal Finance Investing Insurance Credit |
Finance Categories--Copyright/IP Policy--Contact Webmaster |