Dimensional Fund Advisors reduces its fees

(Originally posted in 2020)

Earlier this year, we received the news that Dimensional Fund Advisors was reducing their management fees by varying degrees. With the highest drop being 0.05% and the lowest being 0.01%. This was welcome news for all of our clients because it means an instant increase in performance across the board. The management fee charged by a fund company is one of the two major components that makes up the total Management Expense Ratio (MER) a client pays. The other major component is the advisory fee. To learn more about investments fees as a whole click here.

It is also important to note that although this fee reduction was announced earlier this year it will not be completely visible in published MERs until the semi-annual report in 2021. This delay is caused by the way in which these fees are reported. Published MERs are backward looking and demonstrate the fees that clients have paid and not the fees they will pay. Controlling fees is a major contributing factor to success and any reduction is a welcomed change.