When investors divide their wealth among several advisors, it often becomes difficult to get a clear picture of how much they’re really paying in fees. That was the situation for one of our client’s holding companies, which had split approximately $100 million across three investment advisors — each responsible for a “low,” “medium,” or “high” risk allocation. Using Addepar, our consolidated reporting platform, we were able to bring all their accounts together, analyze the true costs, and reveal opportunities for significant savings.
The Challenge: Three Advisors, Similar Portfolios, Different Fees
At first glance, the client believed their diversification among three advisors created balance — one conservative, one moderate, and one aggressive. When we compared the portfolios side-by-side in Addepar, we discovered that all three had almost identical performance and risk characteristics. The “low-medium-high” distinction turned out to be an illusion.
But what truly surprised the family was the difference in fees. Although each advisor managed roughly the same amount (about $350 million each) one advisor’s account was charging nearly double the rate of the others. Without consolidation, these discrepancies were hidden across separate statements and reporting formats.
The Power of Consolidated Fee Reporting
By using Addepar’s data aggregation and reporting tools, we were able to extract and normalize fee data from each advisor’s custodial reports.
We calculated both account-level advisory fees and underlying fund expenses. The results were eye-opening:
- Advisory fees ranged from 0.50% to 0.95%, depending on the advisor.
- Once embedded fund fees were included — from private equity funds, active mutual funds, and ETFs — the total cost of investing averaged 1.25%, with some accounts exceeding 1.80%.
By comparison, an investor of this size (roughly $100million total) could reasonably expect to pay around 0.50% per year for discretionary investment management in today’s Canadian market.
Simply putting these numbers together on one page made the story clear — and gave the family the context they needed to start asking better questions.
Hidden Layers: The Impact of Fund Selection
Another key discovery was that portfolio composition played a large role in fee variation. Some accounts held private equity funds with management fees exceeding 2%, while others contained ETFs with higher-than-necessary MERs.
We also found overlapping or redundant holdings — for example, multiple S&P 500 ETFs, including both a hedged and unhedged version, and several different gold ETFs with varying costs.
This raised an important question: Why pay more for exposure you already have elsewhere?
Streamlining holdings not only reduces cost but also simplifies oversight, improves transparency, and aligns the portfolio more closely with the investor’s goals.
What Investors Can Control
Markets will fluctuate. Inflation will rise and fall. Geopolitical events will come and go. But investors can — and should — control a few critical factors:
- Fees: Understand your total cost of investing, including hidden fund expenses.
- Behaviour: Avoid making emotional decisions based on short-term performance.
- Process: Document your investment policy and decision-making framework.
At Markdale Financial Management, we believe that clarity leads to better decisions. By using technology like Addepar to illuminate the full picture, investors gain a powerful advantage — knowledge of where their money goes and confidence that it’s working efficiently.
Conclusion: Focus on What You Can Control
Fee awareness isn’t about penny-pinching — it’s about stewardship. When you see all your investment costs in one place, you can make informed choices about which advisors, products, and strategies truly add value.
If you’d like to learn how our family office uses Addepar to uncover hidden fees and streamline complex investment structures, contact us and start a conversation.
