DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing Are Managed Funds Worth the Fees?
Oct 20, 2023
Exploring the worth of managed funds and their fees, comparing active managed funds with index funds, discussing the impact of fees on investment performance, and evaluating the value of financial advice fees in investment management and financial planning.
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Index Funds vs Managed Funds
- Index funds are a passive investment strategy that track a basket of stocks based on set criteria.
- Actively managed funds pay managers to buy and sell securities, which often underperform indexes due to fees.
Pay Advisors for Real Value
- Pay a financial advisor only if their service and advice add value that exceeds their fees.
- If you manage your investments well yourself, paying high fees for management might not be worth it.
Match Fees With Service Value
- Ensure fees you pay for financial advice align with the value and service you receive.
- Advisors who charge annual fees typically provide ongoing service, so evaluate if that justifies the cost.