Investment fee

Pays for:
The investment manager is responsible for the day-to-day decisions about where the product's money is invested. The investment manager could be the product provider (such as a bank) or someone else altogether. The fee pays for the investment manager's costs in considering possible investment, weighing up whether to replace or add to existing investments, and keeping an eye on good deals for their investment products. Investment fees are charged on a regular basis and deducted from your return.

Also known as:

Fund management fee, investment management fee, recurring management fee, on-going management charge.

Cost:

Tips:

• Investment fees for passive products are almost always lower than for active products, because the passive manager has less to do.
• Fees vary depending on the type of asset managed. Cash-based assets should be the cheapest. Property-based assets are usually the most expensive. Generally, the fees reflect the time the manager spends researching and looking after the assets involved.
• If a New Zealand provider uses a product produced by an overseas provider, find out whether the investment fee includes the overseas provider's fee or not. If not, you might find that the overseas provider deducts it from your return before handing the net amount to your local provider.