In a recent Globe & Mail column, columnist Preet Banerjee demonstrates how investments fees will consume a large portion of your original investment over time.

For example, if you invest in a mutual fund with an MER of 2.36 per cent, the MER will consume 44.96 per cent of your original investment over 25 years.  A prospectus will often convey this by a chart which shows an investor will pay $300 on a $1,000 investment over 10 years.  Preet provides the math to demonstrate that over a 25 year period, this translates into $84,884.54 on a $100,000 investment.  The article also provides a spreadsheet that allows an investor to change the investment amount, factor in the annual contributions and create a side by side comparison to investment funds with different costs so you can see the impact on the amount you can accumulate by lowering your costs.

His earlier article Fed Up with high investment fees? Take action, provides suggested ways to try to lower your fees.  For further detail, see Preet’s blog which answers questions from a financial advisor addressing all of the financial advisor’s points using logic and the numbers.

“[T]he truth is being purposely hidden from [clients] by an industry that is in the business of providing financial advice. Last time I checked, fees one pays is a financial matter.” – Preet Banerjee