Fees, costs and expense ratios

Investment costs look tiny as percentages but compound just like returns — against you. Controlling them is one of the few things you can reliably influence.

The main charges

• Expense ratio / ongoing charge (OCF): the annual % a fund deducts. A tracker might charge 0.1–0.3%; some active funds 1%+.
• Platform / account fees: what a broker or platform charges to hold your investments.
• Transaction costs: commissions or spreads when buying and selling.
• Advice fees: if you use a financial adviser.

Why a 1% difference is huge

On 100,000 invested for 30 years at 7%:

• At 0.2% costs you end near 725,000.
• At 1.2% costs you end near 545,000.

That one percentage point quietly costs roughly 180,000 — the "tyranny of compounding costs."

How to keep costs down

• Favour low-cost index funds/ETFs for core holdings.
• Compare platform fees for your balance size.
• Avoid frequent trading, which racks up transaction costs and often hurts returns.

Key takeaway

You can't control markets, but you can control costs — and over decades, low costs are one of the strongest predictors of good outcomes.