Quote:
Originally Posted by Cecil Terwilliger
Big reason off the top of my head is that part of the MER is paying someone to look after that mutual fund and rebalance when necessary, research etc.
You could build your own portfolio all by yourself but then you would be putting in a lot more work and research. That is what you are paying the higher MER for.
|
The biggest difference is the fee going to the financial advisors who sell mutual funds. It's basically the compensation for the advisor embedded into the product. (And realistically, they have to get paid like everyone else). There are some advisors around who work on a "fee-only" basis, and charge a fee either hourly or as a percentage of assets. Then you would buy "f-class" funds which don't charge the extra fee for the advisor, or break the fee out separately.
Basically, the cost of the advice is bundled into the cost of the fund. Typically with ETFs, you either don't get the advice or pay for it independently.