Andrii Andriushchenko
Andrii Andriushchenko
Licensed Dealing RepresentativeAxcess Capital Advisors Inc.NRD #4575551 — verify

Calculator

MER impact calculator: how much fees eat

Real dollar gap between bank mutual fund and self-directed ETF over your horizon

Quick scenarios:

Results

Final capital with MER #1 (2%)
$502,258
Final capital with MER #2 (0.2%)
$715,610
Difference in $
$213,352
Lost to higher MER
30%
T-REX score (efficiency)
70%
Years of work given to the fund
8.9 years

How to read the T-REX score

T-REX = the share of compound return you actually keep after MER. 100% = perfect (no MER). 60% = $40 of every $100 of potential gain went to the fund. Larry Bates in 'Beat the Bank': 'If T-REX is below 70%, you're paying for a service you could get 10× cheaper via self-directed ETF.'

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Estimation based on simple compound math (constant rate, monthly contributions). Does not account for taxes, contribution limits, market volatility. Not investment advice — for individual setup consult a CPA + Licensed DR (NRD #4575551).

Related

FAQ

What is MER and why is 2% 'a lot'?
MER (Management Expense Ratio) is the annual fee deducted automatically from fund units. Canadian bank mutual funds typically run 1.8-2.5%; self-directed ETFs on TSX run 0.05-0.30%. Over a 30-year horizon, 2% MER eats **40-50% of your potential final capital** via compound effect — Larry Bates calls this T-REX (Total Return Efficiency Index).
If market returns 8%, why don't I get 6% with 2% MER?
You DO get ~6% net return — that's correct. But compound math makes the gap much bigger: $500/mo × 30 yrs × 6% = $502K. Same × 8% = $745K. The $243K gap is purely the 2% MER. In hours-worked terms: ~12 years of your savings effort handed to the fund manager.
What does a self-directed broker give me instead?
Self-directed accounts (Wealthsimple Trade $0 commissions, Questrade $0 ETF buy / $4.95-9.95 sell, IB institutional pricing) let you buy broad-market ETFs at 0.05-0.30% MER: VFV (S&P 500, 0.09%), XEQT (all-equity diversified, 0.20%), VEQT (similar, 0.24%). 30-minute setup. Save potentially $200-400K over a career.
Can I hold ETFs in TFSA / RRSP?
Yes — TFSA, RRSP, FHSA, RESP all support broad-market ETFs with no extra restrictions. Self-directed broker lets you open any of these account types for free and buy ETFs at 0.05-0.30% MER.
What about my existing bank mutual funds?
Steps: 1) Open self-directed account at Wealthsimple/Questrade. 2) Request transfer-in form. 3) Transfer in-kind (preserves cost base) or all-in-cash (triggers tax if non-registered). 4) Sell mutual funds, buy broad-market ETF. Total time: 2-4 weeks.