INVESTMENT MANAGEMENT FAQ
- Q. What are your fees?
A. Triune is committed to transparency of fees and believes that our industry as a whole has done a poor job of helping clients understand all of the fees and expenses associated with money management.
- Management fee: Triune’s fee is determined by the total amount of assets we manage for a household as shown in the table below:
Total Balance of Household Accounts: Annual Fee as a Percentage of Household Account Under $250,000 1.25% $250,000-$1,000,000 1.00% $1,000,000-$2,000,000 0.80% $2,000,000-$3,000,000 0.70% $3,000,000 + Customized Account Set-up Fee
(to cover initial trades)Actual Trading Costs Unlike many firms, Triune aggregates all managed household accounts for fee calculation purposes before applying the percentage from the above table. In contrast, many firms use a similar looking schedule but charge the full 1.25% on the first $250,000, then 1% on the next $750,000, etc. Thus the effective rate for accounts over 250,000 may be significantly more than the stated rate for the total amount of assets managed.
- Expenses of underlying investments. Depending on the types of investments being used, these fees can sometimes be substantial and MORE than what you're paying your advisory firm. If you are using active mutual fund managers, according to data from Morningstar, Inc. the weighted average of all domestic mutual fund assets was .91% for 2009. The weighted average of all domestic index funds was .16%, a difference of .75%! For International funds, 2009 Morningstar Data indicates the average active mutual fund carries an annual expense ratio of 1.01% while the average index fund carries an annual expense ratio of .26%, once again a difference of .75% per year. Triune typically promotes the use of investments with lower expense ratios, and it does make a difference.
- Maintenance Fees/Custody Fees: Triune does not charge an annual account maintenance fee. With some alternative investments that are held in your brokerage account (i.e. Reits or Hedge Funds) Fidelity charges an annual $35 custody fee per holding.
- Trading Costs: TTriune custodies client accounts at Fidelity, and Fidelity charges are $24 per trade. Triune receives none of this fee and works hard to minimize the number of trades placed in a given year. Proper construction of the portfolio should also minimize the need for frequent trading.
- Wire transactions or checkwriting: Fidelity has a $15 wire fee per transaction and no fee for account checkwriting.
- Disclaimer: Triune makes every effort to ensure that all of these fee schedules are up to date, but they are subject to change over time. Actual signed client agreements will contain all current fees.
- Q. What types of investments do you typically use?
A. Triune recognizes that there are many approaches that may help you achieve your goals, including the use of active and passive mutual funds, exchange traded funds (ETF's), stocks, bonds, real estate, and even hedge funds. In fact it is important to understand that a diversified net worth may include exposure to combinations of these. At Triune, we are able to deliver this broad diversification at minimal cost. Over long periods of time, many investments will not outperform standard benchmarks and for that reason, expenses are very relevant. If presented with multiple investments options having similar long term investment objectives, the one with the lowest expense offers a significant advantage.
