In general, fees are higher for higher levels of adviser service, more complex investments (such as NZ and overseas shares, and property) and smaller investors. You need to make sure you’re getting value for money – are you paying only for what you need? If you can reduce the fees, you can improve your finances. Even a small difference in a fee (like the difference between 0.5% and 0.75% of your investment over a year) can make a big difference to the amount of money you end up with.
| How much you pay in fees | ||||
|---|---|---|---|---|
| Investing $5,000 a year in monthly instalments | Return | |||
| 1 year | 10 years | 20 years | 40 years | |
| Baseline (no fees) | $5,099 | $60,331 | $146,952 | $449,889 |
| Low cost fee 1.0% | $5,081 | $58,266 | $136,691 | $383,671 |
| High cost fee 3.0% | $5,045 | $54,402 | $118,568 | $283,519 |
| Difference in today's dollars between low and high cost fees | $36 | $3,864 | $18,951 | $100,152 |
The table above shows the difference in fees you would pay over time if you invested every year in a typical retail savings product with a mix of shares and fixed interest. It includes all fees associated with the investment including entry, on-going and exit fees.
The figures in the table