Hi, you asked a clear question, so I will try to answer...
For the 'Cash, Money funds, Bank deposits' portion
$25 a month for her cash being held with Deutschebank.
The interest rate on the account is 0.8% APY.
- I am not in the USA, so I look at this as two different services. For some reason she has chosen to pay a full service banking fee for "private banking". This fee often includes special priority access when she goes to the bank, zero extra charges, a private safety box, free travellers cheques, multiple accounts, maybe free wire transfers and / or reduce forex exchange fee. You need to find out what banking service she NEEDS, and what the competition is offering. There is a chance that the current bank has another much cheaper plan. Banks here typically have three levels of service plans, with $25/month being the most expensive. FYI my Dad has this type of plan and although I don't think he needs it (he could do less), he does use most of the services and gets close to his money's worth..
--I DON"T INCLUDE BANK FEES as INVESTMENT FEES, UNLESS THE ONLY REASON SHE PAYS THIS IS FOR ACCESS TO THE 0.8% SAVINGS ACCOUNT or the FA.
- the 0.8% savings rate
High interest savings accounts (with substantial money that you don't generally touch) earn around 1% here, right now. I think she can do better unless it is less than $20k in the savings account.
For the Mutual Fund portion,
IMOLX which is a Transamerica fund, investing in large capitalization (large companies), with 30% to 50% equity and the rest as fixed income (govt bonds, mortgage securities, commercial bonds and loans, etc). The equity portion is in world-wide accounts. this is actually a transamerica "wrap" product that consists of several other mutual funds from trans america, in different percentage to create a "balanced" fund. These accounts are pricey because of the % MER, but could be good for people with limited $'s invested that want to keep it simple. e.g., if you only had $3k invested, I would not be panicked that you are spending 2% MER, as that is only $60 per year.
This is a pretty conservative fund, suitable for people that may want to take out some, but not all, of their money within the next 5 -10 years. I am going to assume Class fund C shares. 2.01% MER
- load fee costs , assume 3% Front End Load, and $100k invested. To keep it simple I will assume that the gains on the account are withdrawn each year, (or losses topped up) keeping the fund to $100k as the years go by.
You need to look up the actual FE load, but let's say it was a 3% front end load fee, and she holds the fund for 7 years. Then the cost of it would look like:
3% x $100k / 7 years = $428/yr, or 0.428% per year. (okay, simplified but close).
If it is a declining rear load fee, than the cost to her is the lesser profit made in it, to hold it until the rear load fee goes to zero, compared to another investment that she would have switched to. Too many assumptions, so just state it a 0% fee (and PITA) and hold it for now.
PLUS -- MER fee 2.01%-- this is the combined fee for account management, buying and selling the underlying stocks, the fund manager, PLUS the trailing commissions paid to your FA each year.
2.01%MER x $100k = $2010/yr.
Total cost IMOLX if held for 7 years and 3% front load: $3k + $2.01k x 7yrs = $17,070 / 7 years = $2,438/yr = 2.438% of every $100k invested. Note, that most of the Front end load goes to the FA, and maybe 25-40% of the MER.
The MER is because someone is actively reasearching companies and deciding what to buy, and when, and when to sell, the mix will not look like any index. They are trying to beat the index. And the people can hands-on manage that mutual fund cost a LOT of money and someone has to pay them through MERs.
Unfortunately, you may find that it is such a broad based fund that it looks a lot like any worldwide balanced ETF. Instead, Check out Vanguard's Global fund VT, and BND bond fund. You could invest 50/50 with these two and get somewhat close to what the IMOLX is trying to do. (Not exact, but they also have only 0.33% MER in comparison).
Additionally, assuming the FA is a good guy and has my mother's best interest at heart, perhaps this fund has a place in her portfolio for some reason... What place could that be?
Other than being very expensive for the MER / load fees, the role of this fund is a broadly diversified asset allocation across global stocks, conservatively balanced with a wide array of fixed income types of investments. It is a one stop shop fund to get a bit of all the markets, really, in a single, simple, fund to manage. It is good (but expensive) for people with smaller $'s invested and want less complexity. It is good for people that are a bit risk adverse and / or may want to withdraw some of the (but not all) money in 5 to 10 years.
"Equity" portion she is in BAC Callable Preferred stock with a 6.2% dividend. This seems pretty cool, but I have no idea what fees are being charged for her to be a part of this, and it is a single stock accounting for 8% of her portfolio which seems a bit high.
This is actually a dividend player, and the main reason to hold it (rather than just adding to IMOLX instead) is because there is a tax reason or income preference, or a "hot tip" ?!?. It generates good income, as tax -preferred dividends and is the type of stock that retirees like when they start wanting to draw income each month.
The cost for this one will depend on the arrangement with the FA. Here, we look at the year end statement and can see what (in addition to the trailing fees the MER provide the FA for IMOLX), the bank and the FA recieved from these investments. Usually they don't get any money each year from direct stock like BAC being held. Charges tend to be account fees (maybe that $25/month pays for this?) and brokerage fees to buy / sell (that the FA does not keep) . So this one could be "free" other than the account bank fees or a flat annual rate.
Note -- Most FA that do this charge a % for the total value of investments they help manage.. such as 1% or 1.5% of the total investment, but that depends on the contract agreement with your mom and shows up on the annual statement (here it is the December year end one).
I hope this helps. Good luck.
Overall it could look like:
$25/month x 12 months = $300/yr
$100k IMOLX with 3% Front end load, held for 10 years: $2438/yr
BAC -- free otherwise, unless there is a 1% to 1.5% "Fee only" planning charge on the account.
Saving account -- can you get a better rate?