We know that paying fair price for good quality products and services is especially important to the education community. This is the reason why maintaining lower fees is part of our core values.
Since we started business in 1975, we’ve continuously offered some of the lowest mutual fund fees in the industry. We do this by taking active steps that other mutual fund companies may not be in a position to do.
As our financial planners and advisors are salary-based, our MERs (management expense ratios) do not include sales commissions. This encourages unbiased advice and keeps our fees low.
So while most fund companies embed 0.25 to 1 per cent annual sales commission into the MERs1, our decision to forgo this compensation helps to lower our MERs.
We are compliant with regulatory requirements by charging IRC fees (Investment Review Committee) and brokerage commissions to the fund.
All other operating expenses such as auditing fees and custodial expenses are paid by Educators Financial Group — most companies charge these expenses to the fund.
On top of already low MERs, we take it a step further, by voluntarily charging lower fees than our prospectus entitles us. Now that’s something even fewer mutual fund companies do for their clients, but we’ve been doing it for a long time.
1 Chand, Ranga. Globe Fund. How much will it cost?
Fees matter
Over time MERs have larger effect on investment returns.
Over ten years, Educators’ lower MER will garner an increased return of $1,100.
Sources: Median MER of comparable fund provided by Fundata Canada Inc. as at May 2010. Educators Balanced Fund includes IRC fees from December 31, 2009, which is subject to change. Investment return based on assumed annual return of 6 % and HST rate of 13%.
