Here's our investment management fee breakdown (effective July 1, 2019):
|Net Deposits to Portfolio*||Fee|
|Smart Savings Balance||Fee|
* Please note that while net deposits determine the fee your entire investment portfolio will receive, the management fee is charged as a percentage of your portfolio balance.
For your investment portfolios, we calculate the fee on a daily basis by dividing the annual fee by 365 days and applying it to the closing market value of your portfolio on that day. These daily portions are added together and charged to your account monthly.
In short, our fee is quoted annually, calculated daily, and applied monthly. The end result for you, as a Mercer Invest Wise client, is that your account will see a small charge each month.
One thing to note is that these fees do not include the management fees charged by the managers of the investment funds that you hold. These fund management fees are referred to as the management expense ratio (the “MER”) and are expected to be about ~0.2% annually.
In more complex terms, our investment management fee is amount equal to the aggregate of 1/365th of the applicable percentage, or 1/366th in any leap year, multiplied by the market value of the account as of the close of trading on the TSX. The fee will accrue and become due and payable on the last day of every calendar month and shall be collected by the Portfolio Manager directly from the account assets. If you close your account, withdraw the entire balance of your account, or if you or Mercer Invest Wise powered by Wealthsimple terminates the Discretionary Management Agreement, the accrued fee shall be due and payable immediately.
Please note: Mercer Invest Wise will not be liable for any fees or costs charged by a manager of an investment fund, such as an exchange traded fund, that the Portfolio Manager invests in on your behalf. Such fees or costs will be paid, directly or indirectly, from the applicable account pursuant to the terms of investment of each applicable Investment Fund.
For your savings, we calculate the fee based by dividing the annual fee by 365 days and applying it to the value of your portfolio plus daily interest earned. These daily portions are added together and deducted from your monthly interest deposit before it reaches your account.
The end result for you, as a Mercer Invest Wise client, is that the interest you see is the interest you get and there won't be a fee deducted monthly from your Smart Savings. To see more detailed breakdown of our fees, you can always find them at the end of every quarter (March, June, September, December) in your account statements.
Are there any other fees beside your management fee?
Management Expense Ratio (MER)
The MER fee is charged by the underlying fund companies in your portfolio. Since it is not charged by Mercer Invest Wise, it will not be deducted directly from your Mercer Invest Wise account but will be an adjustment to the prices of your funds.
There is a 20 basis point fee on currency conversion in cases where we need to buy or sell US dollars to trade US securities in your account.
The final thing to keep in mind about fees is that they are taxed. The same way you're charged GST on a purchase you make at a store, you're taxed on the fees you pay to Mercer Invest Wise.