Understanding & Avoiding Advisor Fees in Mutual Funds

Adviser fees are standard on load mutual funds. However, you can avoid an adviser fee by purchasing a no load fund. The choice you make should depend on your investment style and not just your desire to save money.

No Load Mutual Funds

A no load fund is offered direct from the issuer. You are not consulting with a financial planner in order to make your decision. Instead, you will analyze the options on your own, select your choice, and put 100 percent of your investment money directly into the mutual fund. For example, if you are allocating $10,000 for investment, all $10,000 becomes your principal investment.

Load Mutual Funds

A load fund is purchased through a financial adviser. It carries a brand name, and there will be an adviser fee. You do not have to do any of the work in selecting the fund. In exchange, you pay your adviser a fee, either based on how much you invest or as a commission on your earnings. The result is you ultimately have a lower principal sum invested, because a chunk of your money goes to adviser fees. However, some investors still prefer this model because they do not have the sophistication, time or desire to select their own investments.