Our free weekly show helping you make sense of your finances. cookies policy. Average Annual Investment Fees | AUM of $62,000.

Most platforms charge an ongoing admin fee, which might be a percentage based on your total investment, although some will charge a flat fee on a monthly or annual basis. The OCF takes into account the annual management charge (AMC) and all the expenses of running the fund. Our general email address is

Money Compare is a trading name of Which? Some types of fund (for example, targeted absolute return funds) charge these on top of the regular annual charge. Which? Don't ignore percentage-fee platforms completely, however, as some stop charging for amounts over certain thresholds. The OCF is like the TER but does not include things like performance fees, as these will vary depending on how well the fund performs.

And higher returns are normally available only with higher risk investments, where the risk of losing your money is also greater. Give us a call for free and impartial money advice.

They will be lower for tracker funds since they will usually change their investments less frequently. Some platforms will include a certain number of 'free' trades per month.

What makes up the costs shown in the table? A small portfolio shouldn't mean you receive inferior customer service: many top-rated platforms now allow you to invest from just £100 a month.

There is also a spread between the buying and selling prices which is, in effect, another charge. You invest in investment trusts by buying their shares, which are quoted on the stock market, so you need to allow for the dealing charges you’ll have to pay to the stockbroker both when you buy and when you sell. Check to see if there’s a performance fee, what would trigger it and how much it would cost you. For everything else please contact us via Webchat or Telephone. A ‘fund platform’ is an online service that administers your investments, typically lets you review your whole portfolio at any time and might offer a range of interactive tools to help you explore your investment options (a fund supermarket is an example of a fund platform). Sorry, web chat is only available on But you should remember that past performance is not a reliable indicator of future performance. Fixed. If you're not already a member, join Which? The ongoing charges figure has become the standard way to compare the cost of different funds.

Alternatively, you might arrange to spread the payment for the initial advice or to pay a regular sum to the adviser for continuing help, in which case the payment might be collected as a deduction from the value of your investment. Financial Services Limited. Many funds must now provide a key investor information document to investors which displays an ongoing charge figure. Percentage-based: $731.60; Fixed-rate: $7,500 The fees applied by your investment platform apply, whether or not your investments are doing well. Bear in mind that the Financial Services Compensation Scheme only protects sums up to £85,000 in the event of platform failure, so you may wish to divide large pots between platforms. Should you save, or pay off loans and cards? Sorry, web chat is currently offline, our opening hours are. For new investments, from April 2014, rebate payments from product providers to platforms, and cash rebates to consumers, have been banned. Up until April 2014 this charge was usually collected as part of the ongoing charges and passed on to the platform provider in the form of a rebate. FCA to ban sale of crypto-derivatives: will it protect you from investment scams? Let’s take three examples below of different AUM figures and calculate the wealth management fees comparison between percentage and fixed-rate averages. - Get free trusted guidance and links to direct support, Clear English Award - Opens in a new window, Money manager for Universal Credit claimants, Workplace pensions contribution calculator, Typical annual charges for different investment types. Saving into a Help to Buy ISA or Lifetime ISA? internet browsers with JavaScript. More details can be found in our In a nutshell, yes. The platform makes a charge for these services. Therefore they are not included in the ongoing charges figure, which is the additional cost that results from using a fund to invest. Most saving and investing products have some fees and charges associated with them, but this article focuses on investment products.

This table provides an indication of the typical annual costs for different investment products, based on ongoing charge figures (OCF). Taking control of debt, free debt advice, improving your credit score and low-cost borrowing, Renting, buying a home and choosing the right mortgage, Running a bank account, planning your finances, cutting costs, saving money and getting started with investing, Understanding your employment rights, dealing with redundancy, benefit entitlements and Universal Credit, Planning your retirement, automatic enrolment, types of pension and retirement income, Having a baby, divorce and separation, what to do when someone’s died, choosing and paying for care services, Buying, running and selling a car, buying holiday money and sending money abroad, Protecting your home and family with the right insurance policies, Coronavirus Money Guidance But fees erode your investment earnings. We will normally respond to your enquiry within 48 hours of receipt. Assumes consistent loss or growth each year. Fixed-fee platforms are likely to work out cheaper, particularly above £100,000, where differences in fees can add up to the thousands. Here’s how £1,000 in a platform costing 0.1% and a platform costing 1% would perform in three different investment performance scenarios, ranging from poor (5% loss), to neutral (0% growth) to good (5% growth): Note: example for illustration only.

The ongoing charges figure has become the standard way to compare the cost of different funds.

Seethe latest investment deals on Which? and get full access to these results and all our reviews. They might be up to 1.25% (or more) on an actively managed funds, compared with under 0.5% for a tracker fund.

Money Compare. Members can log in to see our comparison. Property fund investors could face a six-month wait to release cash under new rules. While some fees are made clear up front, be alert to the fact that others might be hidden.

Investment Management Fees Comparison | Percentage vs. Getting professional help if you are worried about savings, investments or pensions, Help if you are worried about your savings, investments or pension, ISAs and other tax-efficient ways to save or invest, Compensation if your bank or building society goes bust, Tax on savings and investments – how it works.

Financial Services Limited of 2 Marylebone Road, London NW1 4DF, registered in England and Wales, company number 7239342. What happens when your with-profits fund closes, Compensation if you’ve lost money through mis-selling, Financial mis-selling – what to do if you're affected, Assessing the performance of your savings and investments, Diversifying – the smart way to save and invest, Beware hazardous savings and investment products, Ending your endowment or whole of life with-profits policy early, Unit Trusts and Open-Ended Investment Companies (OEICs), Tax and qualifying life insurance products, Structured Products, Structured Deposits and Structured Investments, Spread bets and contracts for difference (CFDs), Fixed interest securities – gilts and corporate bonds, Art, fine wine and other collectibles as investments, Peer to peer lending: what you need to know, Identity theft and scams: how to get your money back, Coronavirus – what it means for you and what you’re entitled to. You can understand more and change your cookies preferences here. Investment management charges are deducted from the value of your investment in order to cover the costs of researching and selecting investments for the fund. The amount of the charge is decided between you and the adviser, but there are different ways to pay. But they have different charging structures to other investments. By continuing to browse you consent to our use of cookies.

To see how much look at the returns John and Jo get in the table below.

© Copyright 2020 The Money Advice Service 120 Holborn, London EC1N 2TD. Limited on behalf of Which? Managing investments involves time and money and you must expect to pay reasonable charges. Here’s how £1,000 in a platform costing 0.1% and a platform costing 1% would perform in three different investment performance scenarios, ranging from poor (5% loss), to neutral (0% growth) to good (5% growth): Financial Services Limited is a wholly-owned subsidiary of the Consumers’ Association (a registered charity) and is authorised and regulated by the Financial Conduct Authority (FRN527029).

A key features illustration might be provided which shows the charges you will pay, including the cost of any commissions, and how these might affect what you get back. Try and make sure you know how much you are paying and satisfy yourself that it is good value for the service and investment performance you’re getting or expect. We use cookies to allow us and selected partners to improve your experience and our advertising. - Get free trusted guidance and links to direct support. Need help sorting out your debts, have credit questions or want pensions guidance?

Endowment policies, investment bonds and whole of life policies are subject to most of these charges too. enquiries@maps.org.uk.

For example, you could pay a lump sum direct to the adviser at the time you receive advice. Since the start of 2013, if you invest with the help of a financial adviser, you pay a separate charge for this advice. Fees and charges on life insurance linked investment products, Check ongoing charges for different funds, How much Income Tax and National Insurance you should pay, Talking money with young people in Scotland, Why we keep money secrets in relationships, according to Relate, How to choose between saving and borrowing. Which? They are equivalent to the costs you would incur if you decided to buy shares for yourself. An annual fee of 0.2% produces a difference of $1,063.60. Over time, this can make a huge difference.

Saturday, Sunday and Bank Holidays, closed. Money Compare's savings comparison tables help you find the best savings account and show the best savings rates, based on both price and the quality of customer service you can expect. It is a fairer and more accurate indicator of the charges and their effect on a fund’s performance than the quoted annual management charge (AMC). Which? It’s quoted as a single percentage figure. This is similar to the total expense ratio (TER) which some funds still publish where permitted. Look for platforms with a low-percentage based annual fee and no fixed fees. They might be up to 1.25% (or more) on an actively managed funds, compared with under 0.5% for a tracker fund.