When investing, it is important to be aware of the fees you are paying as a small difference in fees and costs can have a substantial effect on your long-term investment returns. The Australian Securities and Investments Commission (ASIC) have a set of recommended guidelines for disclosure of fees which are widely used within the industry. Under the guidelines, the cost of purchasing a fund is disclosed in the one place in the product disclosure statement with an example showing fee amounts in both percentage and dollar terms.

The following are some of the more common fees that may apply when investing in managed funds:

Fee	What it's for
Contribution fee	An entry fee will be charged by most managed investments on every investment you make into the fund (includes initial, additional and regular investments). Entry fees are generally paid to your financial adviser or retained by the fund manager if you don't have an adviser. You can avoid entry fees by paying separately for financial advice on a fee for service basis and investing via 2020 DIRECTINVEST with a 100% entry fee rebate.
Withdrawal fee	When you make withdrawals from the fund. Many managed funds only charge this fee where you have chosen to invest in their ‘nil entry fee’ option. Often the fund manager will also chrge higher management fees when you choose the nil entry fee option. You can avoid paying withdrawal/exit fees by utilising 2020 DIRECTINVEST's investment service to receive rebate 100% of the entry fee on the 'entry fee' option.
Ongoing fees	This includes administration, management expenses, expense recover and other fees charged by the fund manager for managing your investment. Ongoing fees are often referred to as the Indirect Cost Ratio (ICR) or Management Expense Ration (MER).
Performance fees	Some managed funds charge a performance fee in addition to management fees. Generally performance fees are calculated as a percentage of outperformance above a disclosed benchmark.
Buy/sell spread	A buy/sell spread may apply when buying or selling units in a managed fund (including when switching between funds). This fee covers the transaction costs incurred by the fund when buying or selling investment fund assets.
Adviser service fees	A fee charged by a financial adviser for their services that is deducted from your investment. This is typically 1%-2% pa and can last the life of your investment. At 2020 DIRECTINVEST, we believe that you should seek professional fee for service advice if and when required. 2020 DIRECTINVEST rebates your entry fee and does not charge adviser service fees.

	The facts about fees in managed investment products - Michael Lannon
	Things to watch for when you withdraw from your investment - Colonial First State