My fee structure:

As you may have read in my "about me" section, ethics is the foundation of my business. So naturally, transparency is very important to me.

For the most part, my advisor fee sticks around 1.00% and there are two ways that I will get paid.

1. A-Series funds: With these funds, the advisor’s trailer fee, (usually 1% for equity funds and 0.5% for fixed income) is a cost to the fund, so it is included in the MER (management expense ratio). What this means to the returns you see on the fund fact sheets (provided with every fund you purchase), is what you get NET of the MER. The returns you earn as an investor reflects performance data that is reported after the fund’s MER is deducted. For example, if your fund’s investments gained 8% last year and its MER is 2%, the reported return would be 6% for that time period.

2. F-Series funds: An F series mutual fund is a special type of loaded fund you can buy without paying a sales charge. These funds contain the same investments as the A-series funds EXCEPT the advisor’s commission (trailer fee) is not added to the MER. Since F-series funds do not pay commissions to advisors, they also come with lower annual fees (MERs).  F-series funds are only available through fee-based advisors, not from commission-based advisors. As a fee-based Advisor I get paid by you directly by charging a fee of about 1.00% of your total portfolio value. The reported returns are NET of the MER, but not of the advisor’s compensation and the account fee.

• So what is the point of buying an F-Series fund?

 

• As you can see below, for the Edgepoint Global Portfolio, the MER on the A-series is 2.12% (including all fees) and the MER on the F-Series is 0.97%. For example, if we are investing $500,000 into both series of this fund, the total expense ratio these funds will see is as follows:

•   F-Series

  •         0.97%      MER​

  •         1.00%      Advisor fee

  •        1.97%        TOTAL FEE

If you compare the cost to buy the A Series version of this fund vs. an F-series fund, you can save approximately 0.15% in fees every single year, based on your portfolio value.

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For the A-series fund: A total of $10,600 (on that $500,000) would be received to pay the analysts, portfolio managers, financial advisor, and other fund expenses.

For the F-series fund: A total of $9850 (on that $500,000) would be received to pay the analysts, portfolio managers, financial advisor, and other fund expenses.

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  Traditional commission-based financial advisors have an incentive to steer investors towards high-commission products, as that is how they are paid. Since I am a Fee-based Advisor, I make my money from annual fees, regardless of the number or type of products that you buy. Since I receive the same fee whether you buy the F series fund or another fund, it reduces the risk that I am acting in my own best interest, instead of yours.