Sales Fees per AUM | Traders Hideout


futures.io - futures trading strategies, market news, trading charts and platforms


Traders Hideout


Discuss day trading practices and futures trading strategies on this forum for all markets. This forum is also for discussing and reviews for brokers, data feeds, and commercial or third party add-ons




 

Sales Fees per AUM

  #6 (permalink)

New York, NY
 
Trading Experience: Beginner
Platform: Vanguard 401k
Broker/Data: Yahoo Finance
Favorite Futures: Mutual funds
 
Posts: 1,039 since Jul 2012
Thanks: 713 given, 2,129 received

In my experience, I'd upper bound (for minimal amount of AUM raised) it at:

Cap intro: <5% of the AUM.

Legal fees at large firms: <1.5%

Admin at big 5 (monthly/daily): <0.25%

Accountants at big 6 (tax): <0.05%

Auditors at big 6: <0.3%

As you can see it's expensive and a 2% management fee is not enough to cover all of these. These go lower and become more efficient as you scale up. You can also go lower with more boutique operations... often boutique brokerage firms will offer to raise your capital at nearly zero/free because they make the business through your trading.

Large funds probably pay about 8-10 bps for admin only. That's why the common advice is to aim for >$100M in AUM because at that point you start to breakeven on these administrative costs.

Reply With Quote
The following user says Thank You to artemiso for this post: