The cost of engineering a transition project incorporates two elements: the transaction costs associated with the liquidation of the holdings and the fee paid to the transition manager. Additional transaction costs are incurred when the assets are reinvested into the new portfolio.

The transaction costs include commission costs, opportunity costs and market impact. A poorly-executed transition can be quite costly to a portfolio. The savings associated with a well-engineered transition can be substantially more than the fee paid to the transition manager. Expect transparency and full-disclosure in costs from TDAM.