Average Fees for Fee-Only Advisors
Simply stated, fee-only advisors do not accept any fees or compensation based on sales of financial products (such as funds, annuities, insurance). According to the 2016 InvestmentNews Financial Study of Advisory Firms (also see a reference here), a survey of 400+ Registered Investment Advisors (RIAs), the average advisor fee for $100,000 accounts is 1.30%, or 1.11% for $500,000 accounts.
Average Mutual Fund Fees
Your mutual funds are not free. On average, owning mutual funds cost you an additional 0.68% in annual fees, according to the 2016 Investment Company Factbook. These fees have declined in recent years, but vary widely by fund, and could be as high as 2%. You do not see these fees coming out of your account in your broker statement. These fees are being deducted by the fund manager, and the fund’s net asset value (and share price) is adjusted accordingly – effectively, the fee reduces the fund’s performance. Visit FINRA’s Mutual Fund Expense Analyzer to look up annual expense ratios. Then, add these fees to your Advisor’s fee to calculate an annual total.
Average 401(k) Plan Fees
Fees for 401(k) plans, the most popular retirement option offered by employers, have declined in recent years, but continue to be substantial. The average total plan cost for a small retirement plan (100 participants/$5,000,000 assets) is 1.25%, or 0.96% for a large retirement plan (1,000 participants/$50,000,000 assets), according to The 401(k) Averages Book. Once again, mutual fund fees are not included here.