Estimated Financial Advisory Fees by Investment Firm

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Financial transparency on a whole may have increased, but too many Americans still don’t understand just how much they are actually paying their advisors. In a recent survey Harris Poll conducted on our behalf, we found that 61% of Americans don’t know how much they pay in investment fees.

Over the course of a lifetime, hidden fees can add up to hundreds of thousands of dollars – dollars that should be padding your golden years instead of lining your financial advisor or product seller’s pockets.

Our latest study, Hidden Beneath the Surface: What Americans Are Paying in Advisory Fees, shines a light on the wide range of fees charged to clients and the difficulty consumers have in identifying them. We used publicly available advisory fee schedules and actual fund fee data from Personal Capital dashboard users to estimate fee ranges at each institution.

While these estimates don’t represent the average fees across all advisory clients at each firm, they reflect what an investor could potentially pay if charged full advisory fees through the listed programs, combined with fund fees in line with what we have observed across a broad sample of accounts in our own data. As always, investors should consult their individual advisors for their specific fee.

Estimated Fees by Institution

In order to create viable comparisons between different firms and compute the impact of fees, we assumed a hypothetical investor and evaluated certain investment advisory firms based on selected criteria, such as the investable asset range is between $100,000 and $1 million, and the firm must have a major national presence. For a full look at the methodology, please see below

FIRM PROGRAM BROKER
DEALER?
ADVISORY FEE* AVERAGE
FUND FEE**
TOTAL
ESTIMATED FEE
Ameriprise Managed Accounts & Family Planning Service YES 1.75% – 3.00% 0.50% 2.25% – 3.50%
UBS Portfolio Management Program YES 2.50% 0.44% 2.94%
Morgan Stanley Select UMA Program YES 2.00% – 2.50% 0.42% 2.42% – 2.92%
Wells Fargo Private Investment Management YES 1.50% – 2.00% 0.43% 1.93% – 2.43%
Merrill Lynch Personal Investment Advisory YES 1.00% – 2.00% 0.33% 1.33% – 2.33%
JP Morgan Mutual Fund Advisory Portfolio YES 1.15% – 1.45% 0.41% 1.56% – 1.86%
Edward Jones Unified Managed Account Model YES 1.25% – 1.35% 0.45% 1.70% – 1.80%
Personal Capital Investment Services/Wealth Management NO 0.79% – 0.89% 0.08% 0.87% – 0.97%
Charles Schwab Schwab Intelligent Advisory YES 0.28% 0.16%*** 0.44%
Vanguard Personal Advisor Services YES 0.30% 0.08% 0.38%
*Take from firm ADV filings (see appendix)
**Calculated by Personal Capital based on user account data from Q1 2017
***From Charles Schwab for moderate risk portfolio: https://intelligent.schwab.com/public/intelligent/faq-intelligent-portfolios/pay-no-advisory-fees.html

Methodology

We assumed a hypothetical investor applying the following criteria:

  • The investable asset range is between $100,000 and $1,000,000
  • The investor seeks a managed account with guidance from a human advisor—purely algorithmic “robo-advisor” options were excluded
  • The portfolio consists of individual stocks, bonds, mutual funds, or ETFs
  • The effects of tax consequences are excluded
  • The costs tied to electronic funds transfer and wire fees, IRA and retirement plan fees, margin interest, ADR fees, account opening or closing fees, or other account-level transactional fees, which can be significant with firms that don’t have a single all-in fee, are also excluded

To select the investment advisory firms for this study, we used the following criteria:

  • The firm must have a major national presence
  • The firm must have a statistically viable number of users in our database
  • The firm must have fee data we can identify and interpret

Given these criteria, the scope of this study includes a representative sample of firms for which Personal Capital has a significant sample of users. There are numerous small regional firms, for example, that were excluded due to the first condition, and a handful of nationally prominent firms that were excluded due to the second or third condition. Nevertheless, we believe the list we’ve compiled is representative of the general range of costs and is therefore useful investor education.

Moreover, the difficulty in constructing an accurate and comprehensive list of available options in the universe of financial institutions speaks to a broader point—fees are very hard to detect and compare—and the odds are stacked against the average investor when it comes to comparing fees across different organizations.

Fee schedules are frequently complicated, thick with legalese, and too often come with hidden charges that are separate from the
 main schedule (not unlike the airline industry). In other words, considering the difficulty financial services experts had finding this information, even with all the technology, data science, and data we have for over 1.5 million users of our tools, the average investor faces a comparatively daunting challenge. 


Our methodology takes into account only two narrow definitions of fees. In the real world, there are many other fees that can add to an investor’s total cost, as well. For example, brokerages sometimes charge additional commissions to trade in and out of individual stocks or bonds. They also frequently sell products like insurance and annuities, which can add another 1%-2% in fees per year. Even worse, they often come with stiff surrender clauses, meaning an investor could lose up to 10% of an investment when pulling out money for an emergency or other spending need. None of these charges are reflected in our analysis, but should be considered before evaluating any firm or the actual performance of the investments. 


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