How does Goalwise charge its investors?


Goalwise is not free.

Although you don't pay Goalwise directly, as a Mutual Fund distributor 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 any '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 distributor (Goalwise) fees?

They vary from fund to fund but typically are about 1% annually for equity funds and about 0.1% every year for debt funds.

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 fees 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!

Goalwise-Charges-1
Example calculation for a SIP of Rs 10,000 per month

In this case, at the end of the first month you would have Rs 10,000 invested with Goalwise. We would get (0.6/12)% of Rs 10,000 = Rs 5 for that month. At the end of next month you would have a total of Rs 20,000 invested with Goalwise so for the second month we would get (0.6/12)% of Rs 20,000 = Rs 10 and so on. For the entire first year, the total fees would come out to be roughly Rs 390 (barely enough to cover just the transaction costs that we incur on your behalf!).

Since it is a % fees, it would increase with your total amount invested (and hopefully at some point we can make some profits if you keep investing with us).

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 can 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