How often does a favorite product or service get less expensive? It almost always goes the other way, right? In a world where just about everything gets more pricey all the time, it’s surprising and refreshing to get news of an actual price drop.
Thus, you can imagine my excitement to learn of the recently announced decrease in management fees by Dimensional Fund Advisors, one of my most trusted and reliable mutual fund companies. Effective February 28, 2020, Dimensional will be reducing the management fees on 77 funds offered in the US: an average reduction in fees of 8% on an asset-weighted basis. I have worked closely with this investment group for a number of years because I’m a great admirer of their evidence-based, Nobel Prize–winning investment research and methods. To me, this announcement once again demonstrates how seriously Dimensional takes the responsibility to offer the greatest possible value to the investors who place their confidence in the company’s expertise and research.
I especially appreciate Dimensional’s commitment to providing the most efficient and cost-effective service to investors because this mirrors my pledge to my clients. As I work with thriving retirees, family stewards, women in transition, and others, I am dedicated to providing value that goes far beyond simple execution of trades. My clients depend on me to have deep knowledge of their individual situations, goals, and priorities. My responsibility to my clients goes beyond portfolio management; I walk with them on their journey through life.
It’s also important to remember that carefully managing fees and expenses is crucial for the long-term performance of your portfolio. As the SEC’s Office of Investor Education and Advocacy recently pointed out, even a fraction of a percent in extra fees and expenses can make a huge difference in the funds you’ll have available to support your retirement or other long-term goals. A $100,000 portfolio with a long-term average growth rate of 4% would increase to almost $210,000 over 20 years, assuming investment fees and expenses of 0.25%. But that same portfolio can only grow to $180,000 if the fees and expenses are as much as 1%.
Investors should not have to wonder what their investments are costing them in fees and other expenses. The fee structure of my clients’ accounts is completely transparent, and my promise to them is that their accounts will always be managed as efficiently and cost-effectively as possible. Thanks to the conscientious and value-conscious professionals at Dimensional Fund Advisors, that just got a little easier.
Stay Diversified, Stay YOUR Course!