By Scott Ronalds

We’re the only company we know of that rewards investors with lower fees based on the size of their accounts and their tenure as a client (see our Fee Reduction Program).

The first aspect of our program is straightforward: the larger your account, the lower your fee per dollar invested. Larger accounts don’t cost us much more to manage than smaller accounts, so we think it makes sense to pass on the benefits of scale to our clients.

The second aspect is designed to encourage a long-term mindset. After 5 years as a client, we give you an additional 7% off your fees; and after 10 years, we up the discount to 14%. It’s a beautiful thing. Clients with large accounts and a 5-Year Club membership card pay some of the lowest fees in the business.

A little secret about the tenure discount: it can be gamed. The clock starts the day of your first investment with Steadyhand. When you reach your 5-year anniversary, the discount applies to all your household investments with us, regardless of when they were made. So if you started with us in May 2010 with a $10,000 investment, you’re now enjoying a 7% fee discount on all your assets with us. If you opened an additional account with us last month for, say $500,000, you’d be getting the 7% discount (plus the additional discount based on account size) on the entire amount invested. We could have structured the discount to apply only to those assets or accounts that have been held with us for 5 years and longer, but we hate fine print and limitations as much as you do.

Expanding on the above example, the total fee on $500,000 invested in the Founders Fund would drop from 1.34% to 0.98% after both discounts. (After 10 years, the fee would drop to 0.91%, assuming the same portfolio value.)

If you’re not already a Steadyhand client, it’s an enticement to get the clock started. But you didn’t hear it from us.