Back to Top
 
 

Efficiency begins with our fees.

 

Every dollar you don't pay in fees is a dollar added to your pre-tax investment returns.

The fees and commissions you pay to invest — the fees you pay to your advisor, fund companies, and custodian, are a key driver in the relative success of your investments over the long-term. That's why we built AlphaGlider with low, transparent fees at every level:

 
 

 
 

Investment Advisory Fees

 

AlphaGlider receives only one form of payment — investment advisory fees on the average value of assets we manage for you.

Our annual investment advisory fee starts at 0.5% for households with $200,000 to invest. How does that compare with other investment advisors? Pretty well, it turns out. Actually, very well.

One of our competitors runs an account aggregation service which over 1.3 million people use to track their household net worth. They found that most of their users with investment advisors pay in excess of 1.0% in annual investment advisory fees.

 

AlphaGlider advisory fees are among the lowest in the field of active advisors:
Average Annual Advisory Fees, by Custodian

Source: Personal Capital, AlphaGlider

Note: Personal Capital and AlphaGlider fees based on a client with $200,000 in managed assets.

 
 

Fund Management Fees

Fund management fees are paid to the companies that manage the funds1 we use in our investment strategies. These fees are automatically deducted from the funds' share prices on a daily basis.

We primarily build our AlphaGlider investment strategies with low-cost exchange-traded funds (ETFs) that are passively managed to an index,2 and occassionally with low-cost, no-load mutual funds. We are completely independent from the fund management companies which supply funds to our strategies, and we do not receive back-door payments from them, unlike some of our competitors.

AlphaGlider Strategy Average Fund Management Fees, June 30, 2017

 

Average Fund Management Fees of Advisors, by Custodian

NOTE: AlphaGlider fund management fee is for the highest cost AlphaGlider strategy, as of June 30, 2017, and is subject to change without notice.

Source: Personal Capital, AlphaGlider

 

Why do we prefer low-cost index funds? It's simple — unburdened by high management fees, index funds consistently outperform more expensive, actively managed funds over long time periods. The chart to the right shows how actively managed funds have fared on average (on an equal-weighted basis) versus their respective indices over the last 10 years, ending December 31, 2016 [S&P Dow Jones Indices, S&P Indices Versus Active Funds (SPIVA®) U.S. Scorecard, pg. 12 & 17]. For example, actively managed domestic large-cap core funds underperformed the S&P 5003 by 1.37% annually over the last 10 years (6.95% vs 5.58%, pg. 12).

As with our investment advisory fees, our fund management fees are also among the lowest in the market.

 

Indices consistently outperform active funds:
10-Year Returns, Active Funds vs Indices, ending December 31, 2016

Source: S&P Dow Jones Indices

 

 
 
 
exponential growth.png

Low Fees and the Power of Compounding


Add it all up and you see that AlphaGlider delivers a professionally managed active investment portfolio at less than one-half the cost of the typical investment advisor.

 
 

All in, AlphaGlider fees are among the lowest in the field of active advisors:
Average Total Fees of Advisors, by Custodian

Source: Personal Capital, AlphaGlider

Notes: a) Total fees includes investment advisory fees and fund management fees, but excludes trading commissions which were not measured by the Personal Capital white paper.
b) Personal Capital and AlphaGlider fees based on a client with $200,000 in managed assets; AlphaGlider fund management fee is for the highest cost AlphaGlider strategy, as of June 30, 2017, and is subject to change without notice.


 

Your savings go directly to your annual returns.
While seemingly modest in any given year, your savings compound over the years to become serious money. As the chart below demonstrates, our lower costs deliver an additional $50,000 to slightly over $150,000 on an initial investment of $100,000 over 30 years, versus our peers [assuming 6% gross returns in a tax-advantaged account (e.g. individual retirement account) for all advisors].

 

Every dollar, or hundreds of thousands of dollars, you don't pay in fees is a dollar added to your investment returns:
$100,000 Invested with Advisors for 30 Years, by Custodian (assuming 6% gross returns for all advisors)

Source: Personal Capital, AlphaGlider

NOTE:
a) Assumes client assets are in a tax-advantaged account (e.g. individual retirement account).
b) AlphaGlider fund management fee is for the highest cost AlphaGlider strategy, as of June 30, 2017, and is subject to change without notice.

 
 

Custodian Fees

Custodian fees are the third form of fees that AlphaGlider clients pay. As the name implies, custodian fees are paid to the custodian of your accounts.

The primary custodian fees on AlphaGlider taxable, retirement, and trust accounts are trading commissions. We specifically chose an independent custodian, TD Ameritrade Institutional (TDAI), that offers commission-free trades for the majority of ETFs we find attractive. We anticipate that trading commissions on accounts held at TDAI to range between $0 to $100 in a typical year. TDAI does not charge an annual fee on its investment accounts, but does apply customary charges on various services such as fund and wire transfers.

The primary custodian fees on AlphaGlider 529 Educational Savings Plan accounts are admininstration fees of 0.2% of assets, charged annually by the Utah Educational Savings Plan (UESP). As we only utilize commission-free, low cost, no-load mutual funds within AlphaGlider 529 accounts, there are no trading commissions in these accounts.

 
 

TD Ameritrade, Inc. is the firm that we use to custody our clients' non-529 plan assets. TD Ameritrade and AlphaGlider are separate and unaffiliated firms, and are not responsible for each other’s services or policies. TD Ameritrade does not endorse or recommend any advisor and the use of the TD Ameritrade logo does not represent the endorsement or recommendation of any advisor. Brokerage services provided by TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. Used with permission.

 
 
"In investing, you get what you don't pay for."


— John Bogle, founder of The Vanguard Group

 

NOTES & DISCLOSURES

1Mutual funds and exchange-traded funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained directly from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
2Indices are unmanaged and investors cannot invest directly in an index. The performance of indices do not account for any fees, commissions or other expenses that would be incurred.
3The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market value weighted index with each stock's weight in the index proportionate to its market value.