Brokerage Investing IRA Rates

When you invest in a professionally managed account, like an IRA, or through a broker, you will pay fees. Professionals manage a wide range of accounts, including individual, joint, retirement, custodial, specialty and business accounts. For more information on IRAs, click here.

If you want to find a financial advisor, look for a fee-only advisor, which is one who is paid only by you as opposed to a commission-based advisor. Commission-based advisors come with a conflict in interests — don’t forget they make money from selling financial products, which might influence clients’ decisions.

If you have a managed account, you’ll likely pay around 1 percent in fees, but that can vary widely. High-net-worth individuals, for example, pay an average of only 0.50 percent — because they have larger accounts, fees are reduced. In other words, a financial advisor can charge you a fee based on many factors, including the size of your account and the type of services he’s providing. In addition, he can break fees down into a number of categories:

  •       Investment management fees
  •       Product fees
  •       Financial planning fees
  •       Platform fee

As you can see, there are different types of financial management — and the costs associated with them vary widely. A broker charges to maintain your account — and his fee might include anything from buying subscriptions for research to assisting you with a trading strategy to charging you to access the trading platform (alternate f/c link for this info: http://www.investopedia.com/articles/active-trading/022315/how-brokerage-fees-work.asp)— and these fees come on top of his commission to execute a trade.

IRA management fees can add up quickly. You’ll pay fun management fees, advisory fees, trading commissions, custodial and service fees and transfer fees. Understand exactly what you’re paying for if you have an IRA.

You cannot deduct IRA management fees on your taxes — they are just taken out of the account — but if you pay your management fees with your own money before they come out of your account you can deduct that as an investment expense. You can maximize your IRA’s growth and deduct those fees this way.