November 1, 2010
Sometimes I wonder if anyone does the math.
A 1% annual fee on a fund doesn't sound like much, but in a 4% equity return world, that's 25% of the potential return. For a perpetual holding, it's also 25% of the total value of the account. That is, putting $100,000 into a fund until retirement is close to simply handing $25,000 directly to the fundco.
This is insane. They charge these fees because they can. I'm very encouraged to see the SEC address the issue.