English Guide

How to control your investment costs?

It is now possible to everyone to access cost-effective instruments under a passive and diversified approach, such as ETFs and a cost-effective broker.

The financial industry has rarely been a trusted partner for the individual investor. This is illustrated by the following anecdote from the classic book “Where are the Customers’ Yachts?” (1940), by Fred Schwed Jr. “An out-of-town visitor was being shown the wonders of the New York financial district. (…), ‘Look, those are the banker’s and brokers’ yachts.’ ‘Where are the customers’ yachts?’ asked the naive visitor.” Today, financial intermediaries are usually getting richer than their clients by charging a very high price on their services. In his book “Stay The Course” J. Bogle shares this view because he “realized that a mutual company would never provide me with the personal fortune that so many denizens of Wall Street would earn”.

New instruments and enhanced transparency make it possible today to everyone to access cost-effective instruments under a passive approach, such as ETFs and a cost-effective broker (See “Platform: Main Options”). As such, the less you expend management and banking fees, the more money stays in your pocket. This reflects the comment of J. Bogle in “Little Book of Common Sense Investing”, “The more the managers and brokers take, the less the investors make.”

In order to facilitate your first steps and reduce the fees paid to the banks, the website Guide Finances includes examples of brokers and key ETF providers, which can serve you as a comparative basis for your decisions. Since investing involves risks of loss and is an important decision, you should take your time and look for alternatives. The main criteria for ETF investment selection are the volume, domicile, replication method, reputation of the service provider and the total expense ratio (which shall be below 0.2%).

Even if you are satisfied with your current providers, please always compare the cost and consider if the service is worth the extra costs.


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