If you’re in you have a 401(k), IRA, or any account that holds investments, I have an important question:
Do you know exactly how much you’re paying in investment fees?
Most people say:
“Not much. I’m just in mutual funds from Fidelity or American Funds. I don’t get an invoice from my advisor that I pay.”
Here’s the problem: the funds might still be quietly charging you 1–2% per year, and not in a way you can easily see.
The Hidden Expense Ratio
Many mutual funds charge internal fees that don’t show up as a line item on your statement. These are typically separate from any advisory/AUM fees you pay, and include:
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Management fees
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12b-1 marketing fees (an annual commission paid to the advisor, often 0.25%–1%)
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Front-end or back-end loads (an upfront or backend commission paid to the advisor, up to 5.75%)
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Trading costs inside the fund
That may not sound like a lot. But over 20 years, a 1.5% annual fee on a $400,000 account could quietly drain over $140,000 of your retirement.
How to Check Your Fund Fees (In 5 Minutes)
Here’s what you can do right now:
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Grab a recent statement from any 401(k), IRA, or brokerage account.
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Look up your fund symbols on Morningstar.com.
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Check the “Expense Ratio”. This is the annual % fee taken out of your investment returns.
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Look for terms like “A shares,” “C shares,” or “12b-1”. Those are red flags.
If your expense ratio is above 0.50%, or if you see a load or 12b-1 fee, there’s a good chance you’re overpaying.
A Real Example
A client came to me with a $300,000 IRA invested in Capital Group American Funds. She was told she had a “balanced” portfolio.
When we looked closer:
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Her average expense ratio was 1.26%
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.75% of this was a 12b-1 commission being paid to her advisor every year, even though she barely talks to him and he provides no real planning or tax advice
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No one had explained it to her, because it wasn’t shown as a charge on her statement
We restructured her portfolio using low-cost ETFs, lowering her fund expenses to 0.15%. This reduces her fund expenses by $3,330 every year.
Want a Quick Second Opinion?
If you’re unsure what you’re really paying, I’ll review your accounts and give you a simple, honest breakdown of:
- What funds you own
- What fees you’re actually paying
- Whether there are alternatives that better fit your plan
No sales pitch. No pressure. Just clarity.
You worked hard for your savings. Let’s make sure you’re not losing it to hidden costs.
– Clint Kraft
Founder and Financial Advisor, Kraft Capital