NEW YORK (CNN/Money) - What is a fair investment management fee? One firm that I am considering charges 1.5 percent of assets under management. A friend told me that he pays 1/2 of 1 percent. How can I tell what is reasonable and fair?

-- Tom, Dayton, New Jersey

Asking what's a fair investment management fee is a bit like asking what's a fair price for a house. It depends. In the case of a house, it depends on the size of the dwelling, the quality of its construction, the types of amenities it comes with and, of course, its location, location, location.

The same idea applies to investment management fees. I could tell you that, in general, investment management fees range from 0.5 percent of assets to 2 percent or so. But there are plenty of managers who will fall outside that range for any number of reasons. In other words, it depends.

One big factor is the amount of money you have to invest. A manager that charges, say, 1.5 percent to manage an account of $100,000, might charge 0.75 percent for accounts of $1 million and 0.5 percent for accounts of $5 million. Generally, the more money you have to invest, the lower the management fee will be as a percentage of assets.

Once you get below $100,000 it's harder even to find money managers who are willing to handle your account, although you can easily find mutual funds that will take your dough. (And, in my opinion, do just as good a job as most private money managers.)

Management fees can also vary depending on what type of investing the manager specializes in. Fees tend to be higher for equities than for bonds and, within equities, fees are somewhat higher for small-cap and international stocks than large-cap domestic shares, the theory being that areas that require more research warrant higher fees.

And, of course, there are numerous exceptions to what I've just laid out. Remember what I said about getting a break if you have a bundle to invest? That may not always be the case. Even big-bucks investors pay what can amount to blimpish fees to invest with some big-name hedge fund managers.

For example, many hedge funds have what's known as a "one and twenty" fee structure -- that is, they charge a 1 percent asset management fee and get an "incentive fee" of 20 percent of the profits. Thus, if the hedge fund earns 20 percent for the year, the manager would take 1 percent as an asset fee, plus another 3.8 percent incentive fee (20 percent of 19 percent). Which means the fees for that year would total 4.8 percent.

So how, given the wide range of fees and variables that can affect them, can you tell what's fair and reasonable? I think the first thing to do is to decide how you want your money managed.

Do you want a manager who specializes in large stocks? Small stocks? Bonds? Would you prefer an adviser who allocates your money among different types of mutual funds? Once you know the type of manager you're looking for, you can begin comparing what different managers will charge for whatever size account you have.

RELATED ARTICLES • An advisor for the small investor? • Is my mom being ripped off? • Retirement: Make your savings last

Don't forget that fees aren't the only thing you should look for when choosing a money manager. Although we all know that excellent past performance is no guarantee of a repeat in the future, you'll still want to look at each manager's track record -- not just the returns but the risks or volatility the manager subjected investors to en route to those returns.

And, of course, you'll want to know what kind of service you'll get. How often will the manager report returns to you and how detailed will those reports be? Will you have occasional face-to-face meetings with the manager or will the contact be by phone only, or through an associate? Can you call the manager with occasional questions?

Once you have a better idea of what you'll be paying, how the manager has performed and what you'll be getting in the way of service, I think you then have to ask yourself this question: Is it worth it?

Let's say you've found a manager who will invest your $100,000 account in a broadly diversified group of U.S. stocks for 1.5 percent a year and will meet with you quarterly to go over your account's performance. Well, are you better off doing that than, say, simply investing in an index fund that also invests in a broadly diversified group of U.S. stocks but charges, say, 0.20 percent a year?

You'll have to decide whether some combination of service, personal attention and the possibility of higher returns with the manager are worth the higher fee.

Obviously, that's a determination that only you can make. But to make it, you've got to do enough research so that you have a good idea of what you're getting for the fee you're being charged, whatever it is.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged."