How does Goalwise charge its investors?

Goalwise is not free.

Although you don't pay Goalwise directly, it gets a recurring fee from your investments via the Mutual Fund companies.

Who deducts the fees and when?

Mutual Funds deduct the fees for themselves as well as for Goalwise. Goalwise does not deduct anything separately.

So let's say you invest Rs 5000 today. No fees gets deducted here. The entire Rs 5000 gets invested at the current NAV.

At the end of next day, the Mutual Fund publishes a new NAV.

New NAV = Yesterday's NAV + Today's Profit - Daily Fees

So the fees is deducted by the Mutual Fund on a daily basis and what you see as the current value (based on the new NAV) is net of all fees.

The Mutual Funds then pay Goalwise its share at the end of every month.

Note: This is the same with all Mutual Fund distributors providing regular funds like FundsIndia, ICICI Direct, your bank etc (irrespective of the 'free account' claims by them).

What are you paying Goalwise for?

You are paying Goalwise for its personalised investment advice and management. This includes our:

(It does take a lot of hard work and resources to provide all of the above.)

How much are these management and platform (distributor) fees?

They vary from fund to fund but typically are about 2.5% annually for equity funds (inclusive of ~1% for the distributor i.e. Goalwise) and about 0.5-1% every year for debt funds (inclusive of ~0.1% for Goalwise).

So for e.g. if you invest 1 lakh in Equity Mutual Funds through Goalwise, Goalwise gets a recurring fee of about 1% of Rs 1 Lakh/12 months = Rs 84 per month.

If you invest 1 lakh in Debt Mutual Funds through Goalwise, Goalwise gets a recurring fee of about 0.1% of Rs 1 Lakh/12 months = Rs 8.4 per month.

So for someone investing with a moderate risk profile, Goalwise's platform charges come out to be about Rs 100 per month for 2 lakhs i.e. about Rs 50 per month per 1 lakh invested.

In comparison to all the services mentioned above that Goalwise provides, this small fee is quite a bargain!

Again, note that although the fees above have been shown as 'per month', that is just for ease of your understanding and comparison. Actual fees are deducted daily and only then the new NAVs for the day is published by the Mutual Funds.

New NAV = Yesterday's NAV + Today's Profit - Daily Fees

If you are an expert investor who does not need any advice or planning or regular tracking of investments, then you can even consider investing in Direct Mutual Funds by going directly to the different Mutual Funds websites and you will save on the distributor charges.

For the rest of us, platforms such as Goalwise provide a very cost-effective way of getting high quality personalised investment management at our finger tips.

Related reads:

List of Mutual Funds Brokerage for Goalwise

How Goalwise selects the best Mutual Funds and keeps you invested in them

How Goalwise makes investing in the best Mutual Funds easy for beginners

How exactly do Mutual Funds charge their fees?

The costs and taxes associated with investing in Mutual Funds