For a long time now, I have been a strong advocate for low fee investments. One can argue that paying less for anything, not just mutual funds put money back into your pocket. So why don’t more people do it?

For one thing, I think a lot of people need advice and direction. When it comes to the world of investing and personal finance, many people need to use professional financial advisors for help as opposed to doing it on their own.

If you need help, then chances are you will pay a higher fee on your mutual funds because the advisor’s compensation gets bundled into the fees.

One example of a high-cost investment product is a segregated fund that is also sold through advisors or insurance salespeople. Segregated funds have even higher fees than most mutual funds because they offer certain guarantees of your capital. Investors need to take an objective look at these guarantees to see if they are advantageous and worth the higher fees.

Low cost is for the do-it-yourself investor

At the other end of the spectrum, you can save a little money on your investments by doing it yourself. I equate this to the home renovation business. If you want to renovate your home, we live in a world where you can do it yourself. Do a google search on how to head to the local Home Depot and away you go. To do this, you have to be inclined to get dirty and do the work and if you do, you might save some money (as long as you don’t screw up with mistakes). Others, however, may not have the time, the knowledge or the desire to do the work themselves so they are more likely to hire someone to do the work for them. Hiring someone will cost more!

Do it yourself investors are likely to use low fee products like Exchange Traded Funds (ETFs) or individual stocks. Some advisors will utilize ETFs or securities in their portfolios but they often add an annual compensation. Sometimes these advisors are known as FEE-BASED advisors as opposed to FEE ONLY advisors.

A new breed of mutual funds

I guess they are not really new but there are mutual funds that have low fees but still give service. There’s a small market of mutual fund companies that allow investors to ‘deal direct’ (not through an advisor) and access service with a lower fee product.

One of those players is Steadyhand Funds. I had the pleasure of sitting down with Tom Bradley as he passed through Edmonton. For those of you who don’t know Tom, he is the former CEO of Phillips Hager and North (now owned by RBC). He is the President and Co-Founder of Steadyhand Investment Funds and writes a bi-weekly column in the Globe and Mail. He’s a smart and highly respected guy in the investment industry.

What I think is cool about the Steadyhand model is they offer low fees (0.65% to 1.7%) for actively managed, concentrated, unconstrained portfolios but still with some personal service. In our conversation, I was impressed with their value-added when Tom talked about how they “pick up the phone when people call” and they give simple, basic investment advice to clients who want help. Their funds also have very low minimums of $10,000.

If you are not familiar with Steadyhands or Tom Bradley, I would encourage you to read some of the stuff on their blog. They really have some terrific information. Tom and his team are transparent, open, honest, passionate and best of all approachable. If you want a copy of Tom’s book “Investing is Not Rocket Science”, contact them

By the way, I have no financial interest in Steadyhand Funds and I do not get paid if you go see them or buy their funds.