Cost
The cost of securing the necessary expert help in getting a mutual fund started and keeping it running is now within reach of nearly any fee advisor or investment manager who wants to start their own fund.
Initial setup cost for a mutual fund through our service is approximately $25,000 to $30,000. This includes legal fees, prospectus and SAI development, SEC filings, contracts for service providers, 500 investor packages (prospectus, application, return envelopes) and web page development. Setup costs typically run between $75,000 to $100,000, and up for other service providers.
The annual costs of running a mutual fund primarily consist of bank custody fees, legal services, annual auditing fees, transfer agent and accounting fees, fund administration fees, trustee fees, state registrations and printing/mailing cost. Below is a typical list of the annual operating costs for running a mutual fund with $10 million in assets through our services group.
The cost of securing the necessary expert help in getting a mutual fund started and keeping it running is now within reach of nearly any fee advisor or investment manager who wants to start their own fund.
Initial setup cost for a mutual fund through our service is approximately $25,000 to $30,000. This includes legal fees, prospectus and SAI development, SEC filings, contracts for service providers, 500 investor packages (prospectus, application, return envelopes) and web page development. Setup costs typically run between $75,000 to $100,000, and up for other service providers.
The annual costs of running a mutual fund primarily consist of bank custody fees, legal services, annual auditing fees, transfer agent and accounting fees, fund administration fees, trustee fees, state registrations and printing/mailing cost. Below is a typical list of the annual operating costs for running a mutual fund with $10 million in assets through our services group.
Annual Fee
$7,000
$12,000
$5,000
$32,000
$30,000
$12,500
$2,500
$3,000
$713
$10,000
$5,000
$119,713
A $10 million fund with a total operating expense ratio of 1.5% generates $150,000 per year in revenue netting approximately $30,287 in revenue after expenses. As the fund grows, the net income to the advisor dramatically increases as a percentage of operating cost increases at a much lower rate. Actual expenses and net income are for example purposes only.
Description 2011 Estimate
Bank Custody
Legal Services
Blue Sky (limited reg.)
Accounting & Shareholder Servicing
Administration
Audit Fee
Printing/Mailing (Year 1)
Trustee Fees
SEC Fees
Distributor and Compliance Officer
Misc. Expense
Total Expenses