Low Fees at Finax Are Actually Even Lower
The actual annual portfolio management fee paid by Finax clients in October 2021 was only 0.86% + VAT. Due to numerous discounts and promotions, the cost of investing with Finax is significantly lower than the basic fees posted in the price list. We continue to stick to our commitment to make investing cheaper, simpler, and more affordable, aiming to help Central Europeans build their financial wealth efficiently.
Radoslav Kasík | Our process | 6. April 2022
- What fees does Finax charge?
- How did we compute the actually paid fee of 0.86% p.a. + VAT?
- Why are the costs of investing in Finax lower than in the price list?
- What are the extra costs of investing in Finax?
- How fees impact the returns of individual asset managers – a comparison of results
- Finax is the ideal investment solution
Finax was founded to offer residents of Central Europe an effective investment solution to value their savings and build long-term wealth. Low fees are the cornerstone of fair investment services.
Juraj Hrbatý, the founder and chairman of the board of Finax, recently described the journey of creating his own securities trader, where you can find the whole background of Finax’s establishment.
What fees does Finax charge?
At the time Finax was founded, in early 2018, you would have a hard time searching for a similar investment solution - simple, comprehensive, accessible to the masses, and having comparable fees and performance.
For managing Intelligent Investing portfolios, we charge an annual fee of 1% + VAT of the volume of assets under management. At Finax, clients will also encounter a payment processing fee in the amount of 1% + VAT for depositing amounts below 1000 euros. You can find more information in our Price List of Services.
In reality, the collected portfolio management fee is only 0.86% per year
The actual average portfolio management fee paid by Finax clients in October 2021 was only 0.86% p.a. + VAT.
We calculated the actual cost as a simple ratio of the fees charged in October to the average value of assets under management.
It is based on the total amount of portfolio management (PM) fees paid by Finax clients in October 2021. This amount, divided by the average volume of assets under management during October, gives the percentage ratio of the fee. The size of the fee is then converted to an annual value:
In September, this portfolio management fee actually paid by clients was even lower, at 0.85% p.a. + VAT.
I want to invest efficiently.
Why are the real investment costs lower?
The main reason is the wide range of discounts available to clients:
- Discount for referring friends
- Discount for transferring an investment from the competition
- Reduced portfolio management fee for Elite clients
- Lower fee for managing the Intelligent Wallet
In addition, we regularly bring various promotions, enabling you to reduce the real cost of your investment even more (theoretically down to zero).
Special ongoing promotion - Invest cost-free for a year
Ongoing special investment transfer in Finax lasts until April 15th 2022. Learn more in the article Invest Cost-Free for a Year.
Invest less expensive.
And what about other costs?
Many of our clients perceive the fee for processing payments of up to 1000 euros (1% + VAT of the deposit) more sensitively. Psychologically, fees paid on the investment input bother people more, even though their impact on the investment outcome is more negligible than the portfolio management fee paid from on investment value each year.
Only 42.5% of clients, i.e. less than a half, currently pay the payment processing fee on at least one of their investment accounts in Finax. The explanation also lies in various past promotions, which enabled our clients to get rid of this fee for a lifetime.
If we include the payment processing fee in October costs of our clients, we will get total investment fees of 0.91% p.a. + VAT paid to Finax.
After adding the costs of the ETF funds themselves (management fee) to this average fee, we obtain the total cost of the investment, the so-called TER (Total Expense Ratio). ETF fees are deducted directly from the funds' assets and reflected in the price of their shares.
In the case of ETF funds we use, these are annual fees paid within the funds‘ prices ranging from 0.07% to 0.47% p.a. The average management fee of ETFs in the Intelligent Investing portfolios is 0.18% p.a. (asset-weighted, i.e. determined precisely according to the value of assets Finax clients hold invested in individual ETFs).
In 2021, Finax did not provide investment advice to any client, hence not collecting any income from this fee. Registration of direct clients takes place without advising, primarily online. The Finax Elite department also provides no investment advice.
How fees impact results – real values of asset managers
Global stock markets achieve a historical annual return of 8 to 10% on average. In the better cases, the results of investment managers are roughly around this market valuation, but many have been struggling to catch up with them in the long run.
The impact of fees on investment is no rocket science. There is an indirect relationship between the investor's net return and the height of associated costs.
When the manager keeps a greater portion of the maintained assets, the investor is, naturally, left with a smaller portion of the returns. And the higher the fees, the more the investment company profits off of the investment. The ratio of the asset manager's revenues to the volume of assets under management is a great indicator of the actual costs of investing with that company.
Warning: All data related to the historical development of Finax portfolios are modeled and were created based on backtesting of the data. We described the method of historical performance modeling in the article How do we model the historical development of Finax portfolios. Past performance is no guarantee of future returns and your investment may result in a loss as well. Inform yourself about the risks you are taking when investing.
Take a look at investments in Finax via the transparent account of Dominik Hrbatý. Domino has been investing with us for 3.5 years already. How much did he earn over that time?
See inside Dominic's account.
You can also invest on equal terms.
Finax is an ideal investment solution
From an investor's point of view, Finax offers a very user-friendly, comprehensive, and efficient solution that stands out compared to the alternatives, but more importantly, it can save you a lot of time. Time is the most valuable commodity in our lives.
Thanks to Finax, you don't have to waste it brooding over the secrets of investing, choosing the optimal tools, and managing your investments. We will take care of your wealth for a fraction of the value of your savings.
Additionally, you can save for each of your financial goals in a separate investment account, which will further optimize the planning and management of your assets.
You will get a cheap investment with widely spread risk tailored exactly to your profile, with high returns and a pleasant user interface to track the investment, and with unrivaled education on finance.
Become a client of Finax and let us secure you a better future.
Start investing today.
Transfer your investments to Finax and invest more profitably and with discount.
