Can someone provide an example of the fees that a manager would charge to a client and how they should be disclosed? I was under the impression that most managers charge the client one asset based fee that encompasses all charges (custody, statements, commissions etc) but the AMC makes it sound like managers typically nickel and dime clients. Can someone explain this?
When they say they must report average or expected costs, do they mean like the section in mutual fund prospecti where it says, on a hypothetical $10,000 investment, you would pay $100 per year…
Many firms charge mgmt fee, cost of custody, and brokerage commissions separately. Additionally some custodians charge for detailed tax reports and the manager might pass the cost on to client if the client has requested this special tax service. The average/expected would be just that…a prospect comes in with a $1MM account for you to manage and you are to provide him your estimate of what his various costs will be (like the ones I just mentioned above). A simple way to do this would be to find a comparable account size of a client or clients that you already have and thus be able to provide what their average costs had been.