by KYW's Salil Gutt
It is in down markets that investors start paying extra attention to fees and expenses in their mutual funds and other types of investments. The message is slowly sinking in that in the long run higher cost investments could mean almost a third to 40% less in total assets compared to low cost index funds. In 2007 some 57% of new investor money went into index funds and ETF's. The only one making out well is the middleman.
Here's a way to compare to see if you are paying too much. Go to the website finra.org/fundanalyzer. That's FINRA. It offers side by side expense comparison of mutual funds and ETF's.
One other thing. There is an additional sneaky fund expense item that is not openly disclosed by financial advisors. It is called a 12b-1 fee. This so called marketing fee pays the advisor an extra commission year after year without your knowing about it. The SEC has been trying for years to rein in this cost amid howls of protest from the financial industry. Myadvice, ask about 12b- fees and just don't give your business to funds that charge such a fee.
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