Fees are back in the spotlight.

And no, we don’t mean the fees you charge clients. The current fee issue that made its way to the Supreme Court this week, deals with the expenses charged by mutual funds.

The high court decided to send the case back to lower courts with the caveat that guidelines from 1982 must be used to determine if fund fees are excessive. And while both sides were able to claim some measure of victory, those old guidelines gave funds wide latitude in setting fees.

This is all the more reason that you need to be extra diligent for clients.

Meanwhile, even institutional investors are pushing back on the high fees they pay to their general partners in private equity deals. It seems pension plans are tired of paying “two and twenty” for a market that proudly is wrong more often than it’s right.

So fees are in the news and your clients will likely pay more attention to them. What should you be telling them?

In a nutshell, clients are not going to get something for nothing, but they can easily overpay if they aren’t careful.

Research from Standard & Poor’s indicates that expense ratios can vary widely between one basis point to 10.9%, depending on the investment. Most of that difference depends on the product, of course, with the more exotic varieties generating high fees. And to a large extent, that’s fair.

But sometimes, the very same product can have varying fees depending on where you go. Another research project from the rating agency shows S&P 500 Index funds, about as widespread and basic a fund as you can get, can post widely different performances after expenses are factored in.

In the year ending Sept. 30, performance of S&P 500 funds varied between negative-6.1% and negative-9.3%. That’s a major difference. Some of this variation comes from the fact that ETFs that are supposed to be tracking the same index can actually be structured differently. But the biggest difference stems from net expense ratios, said Dylan Cathers, an S&P equity analyst.

Among the highest ranked mutual funds in the group, he cited in a report United Association S&P 500 Index Fund, Schwab S&P 500 Index Fund, and Fidelity Spartan 500 Index Fund. All three funds outperformed peers over the trailing one, three, and five-year periods. The S&P’s Spider 500 ETF, by the way, declined 6.9% over the same one-year period.

Cathers said that S&P relaunched a new service late last year for advisors that analyzes mutual funds using a cost-base analysis as one factor. This was an enhancement over a more “backward-looking” service, he said.

Both S&P and Lipper offer services that can help winnow down the universe of the thousands of mutual funds, according to your client’s broad preferences.

Tom Roseen, a research manager at Lipper, said that only after a client narrows that larger universe should he then start sorting by expenses. If he sorts by expenses first, he’ll preclude some funds that truly need to charge higher fees to deliver their service, like exotic investments or even an overseas fund. So your client needs to first decide what he wants (with your help) and then get the cheapest deal he can. Because the old advice still applies: “Sometimes, you get what you pay for,” Roseen said.

So even though fees are indeed necessary in many cases, you can take step to minimize them for your clients. In better times, investors and advisors alike tend to ignore fees because everyone is making money. And now that things are looking up again, there is a worry that that mindset will prevail again.

“I hope there is fundamental change and people realize that investing is not just looking at the bottom line,” Cathers said.

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