Pooled index funds have become very popular over the last three decades. This is due in part to the ease of access it provides small investors who want a diversified basket of stocks for a low initial investment. While pooled index funds and ETFs (exchange-traded-funds) may be appropriate for small investors, there are a few considerations affluent investors should keep in mind before using these products. Index funds have several drawbacks due to their pooling of different investors’ funds. It’s important to understand these disadvantages before investing in a pooled index fund product. The chart shows below how these disadvantages can impact the investors results with a market-cap equity fund or a pooled bond fund: Hypothetical Illustration of Pooled Funds’ High Cost *Fees and cost are hypothetical and not reflective of any specific cost associated with a particular fund. A brief explanation of these costs can be found below: Investment Advisor Fee: Advisors charge a fee for asset allocation or portfolio construction, but simply invest their clients into mutual funds or ETFs that the advisor has no part in constructing or managing. This effectively means