# How do I calculate the long term Brokerage service cost for my dollar cost averaged investments?

I'm currently in the middle of comparing brokerage firms cost-wise. One brokerage firm charges its service fee based on an annual rate that is charged monthly. Since I want to employ dollar cost averaging, the service fees rise every month. How do I calculate the total amount of service cost paid after a 25 year period?

I believe this is an arithmetic sequence since the structure would look like this:

``````MP = Monthly service fee percentage
AP = Anual service fee percentage
I = Initial investment
M = Monthly investment
N = Period (1-300)
SF_N = Service fee in period N

MP = AP / 12
SF_1 = I*MP
SF_2 = I*MP + M*MP
SF_3 = I*MP + 2M*MP
SF_N = I*MP + (N-1)M*MP
``````

Is this correct? Would the total sum after 25 years then be:

``````S = (25*12*(I*MP + (I*MP + (300-1)M*MP)))/2
``````
• Are you planning to have someone manage your money, or invest on your own? Nothing is free, but there's quite the difference between the 5 basis points (i.e. .05%) an ETF will charge, and a 1% management fee layered on top of the investment itself. Jan 6, 2017 at 17:25
• I'm investing myself. This is simply the service fee they charge. This doesn't include transaction fees. Jan 6, 2017 at 17:26
• You should not have any service fees. Some brokers even offer a number of ETFs with no trade cost. You're buying/selling the ETF for free and just paying the ETF expense. You can do the math above if you really want to be scared straight. Jan 6, 2017 at 17:28
• Many do. And I respectfully say "good for them." Because many don't. In the US, Schwab, Fidelity, Vanguard are among the ones I'd use. Jan 6, 2017 at 17:31
• @JoeTaxpayer I found a broker which offers both zero service and transactional fees for ETF's that sort of resemble my original selection. I'll keep this thread open for people looking to calculate their monthly service fees as I believe this is the correct methodology (without monthly gain). Jan 8, 2017 at 20:41