We at KilterHowling always think in terms of return and risk but this still is not common practice.
Most clients and investment professionals even look at fees as the first cost to achieving investment results.
And while that’s right to some degree, the real cost to a portfolio is the risk that it takes.
Said differently, one spends dollars of risk to gain dollars of return.
Fee efficiency is the last step in the investment process, not the first.
Here’s an industry article that gets at this point by looking at the hedge fund industry wherein fees are often high (well above 2%).
After taking risk management into account, the alternative / institutional investment world has outperformed the S&P500.
Our investment approach at KilterHowling should have similar results going forward.
And we never charge more than 1.00% to any client – a fee that includes both asset management and financial planning.