Thrifty Thinking: Understanding Expenses and Fees - the True Cost of Investing

A key part of the cost of an investment are the fees and expenses associated with the product and the services of a financial professional. In order to help investors get a handle on those costs, the nonprofit Alliance for Investor Education (AIE) is now offering "Understanding Expenses and Fees: The True Cost of an Investment" at http://www.investoreducation.org/expensesandfees.

AIE is a consortium of 12 leading U.S. financial-related foundations, nonprofit organizations, associations, and governmental agencies.

While investment fees may seem small initially, they can add up to a significant sum of money. For example, the difference between 0.25%, 0.5% or 1.0% in annual fees could add up to thousands of dollars over time. Current investors have options available to reduce the fees they are paying, but the number one suggestion is this: Do your research first, before committing to an investment.

AIE president Christina Kilroy, who also serves as the vice president of the Investment Company Institute Education Foundation (ICIEF) said, “Some investors do not take the time to learn of the fees and expenses associated with their investments. AIE is encouraging investors to explore these resources so they can know the questions to ask of their financial professionals and can understand the true cost of investing. We want all consumers in the financial services industry to have the resources available to become informed and empowered investors and to be able to reap the full benefits of their hard-earned time and money.” 

The new “Understanding Expenses and Fees: The True Cost of an Investment” section of the AIE website features the following ten resources for consumers:

• Understanding Fees - U.S. Securities and Exchange Commission
• Investment Fees - Investor Protection Institute
• Focus on Fees: Fact Sheet - CFA Institute
• Fee-Based Account Questions & Answers - Financial Industry Regulatory Authority (FINRA)
• How Fees and Expenses Affect Your Investment Portfolio - U.S. Securities and Exchange Commission
• Getting Help With Your Investments - Investor Protection Trust
• The Impact of Expense Ratios on Retirement Income - American Association of Individual Investors
• Frequently Asked Questions About Mutual Fund Fee Disclosure - Investment Company Institute Education Forum
• Mutual Funds and ETFs - Investor Protection Trust
• Understanding Commodity Futures and Options Contracts - Commodity Futures Trading Commission

For an overview of other investor education resources from AIE members, go to http://www.investoreducation.org.

ABOUT AIE

Founded in 1996, the Alliance for Investor Education website at http://www.investoreducation.org provides investors with access to a full range of information they need to make wise investment decisions. The 12-member Alliance for Investor Education is dedicated to facilitating greater understanding of investing, investments and the financial markets among current and prospective investors of all ages. We pursue initiatives for education and join with others to motivate Americans to obtain objective information and increase their knowledge and understanding of investing.

Full members of the Alliance include: American Association of Individual Investors, CFA Institute, Certified Financial Planner Board of Standards, Inc., Financial Industry Regulatory Authority, Investment Company Institute Education Foundation, Investor Protection Trust, PIABA Foundation. The U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading Commission, the U.S. Federal Trade Commission's Bureau of Consumer Protection, the Board of Governors of the Federal Reserve System, and the North American Securities Administrators Association are the governmental and quasi-governmental advisors to the Alliance.