Trail fees on top of AMC

[mno101]

Hi all,
looking for confirmation here...my interpretation of trail fees are that they are 'an annual charge paid to your financial advisor for which in return they will advise on fund switching etc. based on market movements/forecasts.'
my questions is, if I am investing in an actively managed fund (i.e. with a fund manager) then should i be paying trail fees?
am I missing something?
rhks

 

[Marc]

You never get to meet the fund manager so they have no idea about your circumstances, that’s what you pay the adviser for

 

[TheBig40]

Generally the AMC is for the management of the fund, the actively managed funds will have higher fees.
The trailing fee is the commission the broker/advisor is getting for selling you a product such as an active or passive fund and from my experience the actual fees/charges are a hard to unravel mystery.

 

[Zenith63]

Give careful consideration to whether you want to pay your advisor fees via commision or simply pay each time you need advice. The percentages seem tiny and generally represent a small cost in the early years of an investment, but as time goes on they become quite meaningful.

When I was looking at pensions a couple of years ago I had the option of paying a 1.25% AMC to an advisor or 0.75% directly to the pension provider. I was going to be putting in €1000 a month, so the advisor was only making €60 in year 1, seems like nothing and a great deal for the advice I was geting. However if I built that pension up towards the €1m I was aiming for over 30 years the advisor would have earned over €60k in commission. So I could hire an advisor every 5 years to review my pension (far too frequent), pay them €10k (far too much) and still come away better off.