There is no body who can guarantee a return of 20% CAGR year on year. Anyone promising a very high return for a long period is likely taking a high risk approach with your money.
The best approach to achieve a good return on a consistent and long term basis would be to invest in a diversified equity mutual fund. An example would be Quantum Long Term Mutual Fund which has given about 15% year on year for the last 10 years. Again past performance is no guarantee but one can pick funds that are process driven, not too volatile and have a good work ethic.
Coming to the fees part, a high fees can reduce your net return significantly. Many ‘Portfolio Mangers’ offer a 2% fee + 20% share of profits above say 10%. This model will make the portfolio manager richer no matter what happens to your portfolio.
In my view, a reasonable fee should be about 1.5% or so including all expenses. One way to do this is through direct mutual funds which have an expense ratios of about 1% to 1.2% (on ‘regular’ plans this comes to about 2.5%). Your financial planner can be paid a small fees to help pick the right funds and align your portfolio.
