Investment Fees

Last updated: April 13, 2016

Fees You Should Expect to Pay

Investors should understand all fees and charges associated with their investments:

  • Understand how the broker or investment adviser is paid. 
  • Ask for a copy of the firm’s commission schedule. 
  • Investment advisers must disclose all fees in the signed contract.

Commissions: Higher the Risk, Higher the Commission

In general, brokerage firms collect the highest commissions on the complicated and risky investments. 

The sale of actively traded stocks generates lower commissions.  Commissions on even less risky investments, such as U.S. Treasury bonds, are even lower. 

Whatever the investment, the broker receives a certain percentage of the commission. The brokerage firm receives the rest. This amount is stated in his agreement with the brokerage firm.

Other Ways Advisers Get Paid

Investment advisers receive compensation in several ways. They may charge:

  • A flat fee
  • An hourly fee
  • A percentage of assets under management
  • Commissions from product sales
  • Or any combination of these.

Account management fees also may be charged to the consumer. 

  • These fees could be an annual charge to maintain an account. 
  • An account that fails to generate any commission within a year could generate a fee.

*The information on this page is credited to IPT and Kiplinger. Their original materials are made available on the Kansas Securities Commissioner's website.

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