All investments have an expense to compensate the great people who manage them. This is called a “management expense.” We seek funds that are low-expense in every aspect.
What does this mean?
There are tens of thousands of investment vehicles and every day more are added to the list. Navigating through this monumental list is daunting. The industry allows various types of fees in funds, so what are you paying?
Types of fund expenses
• Loads – many funds have a one-time expense upon entering or exiting a fund. These expenses range from ~2% to over 5% of your entire investment.
• Wrap fees – a practice often found in funds offered by insurance companies, this is an ongoing charge over and above a management fee.
• Commissions – another fee associated with insurance products paid directly to the salesperson
• Management fees – we all pay management fees to the fund manager. For instance if you buy a Fidelity Investments fund you will be paying the management fee to Fidelity.
A management fee is the only fund-related fee you will pay when FNI places you in your investment funds. Note that Fidelity Investments, our Custodian, applies trade fees to funds that don’t fee-share. A few of the funds we offer are associated with trade fees of no more than $25 per occurrence. We try to avoid these fees whenever possible by limiting trades.
We will not offer any investments that carry a wrap, a commission or a load, and we NEVER sell products that are associated with sales contests or perks. These are all additional charges that, over time, diminish your overall fund performance.
We come about your investment plan honestly, placing you in funds that we believe are in your best interest. We work hard to match low fees with sound, long-term investment results from actively managed funds.
Am I billed separately for fund expenses?
No. Management fees are built into the price per share of each fund. How much are you paying? The best way to see what you are paying for management fees is to reference www.Morningstar.com. Enter the ticker symbol for your fund and see the items “Expense Ratio” and “Fee Level”. Unless a fund is performing particularly well, you don’t want to be placed in a fund that is categorized as “High” fee level.
See our Advisory Fee section for a full description of our service fees.