![]() ![]() We've done our own research into how £1,000 in a fund costing 0.1% and a fund costing 1% would perform in three different investment performance scenarios, ranging from poor (5% loss), to neutral (0% growth) to good (5% growth). Netwealth says that it's the all-in costs and charges in particular that can erode returns over a 10-year period.įor example, it found with £500,000 worth of investments in a 'moderate' risk portfolio, a reduction of 1% per year in total charges amounts to a saving of £75,000 over 10 years, rising to £240,000 over 20 years. How much could you save by switching investment provider? Find out more: compare investment platform fees and charges.It's worth mentioning that other platforms could follow suit, as the Financial Conduct Authority (FCA) is due to consult on banning investment platforms from charging exit fees, describing them as a 'major barrier' to competition. ![]() Some platforms charge based on the number of investments, some charge a flat fee by product and some charge both by product and number of investments.Ī number of platforms don't have any exit fees such as: Whether or not this is a barrier to switching providers depends on the size of your pot - as exit fees come in different guises. Most platforms also charge you exit fees for closing your account. Performance fees typically take an extra 20% of everything above a certain level of performance. The OCF does not include things such as performance fees, as these will vary depending on how well the fund performs. These funds can easily add about 0.1% on top of your AMC. ![]() The OCF also takes into account other additional costs such as trustee and auditor fees that are taken directly out of your fund. Meanwhile passively managed 'tracker funds' - which are automatically selected to match an index or part of the market - tend to have lower AMCs, starting from around 0.1%. This includes the annual management charge (AMC), which is usually made up of a number of different costs and typically ranges between 0.75% to 1.25% in most actively managed funds - funds in which a manager or management team makes decisions about how to invest the fund's money. When you invest you'll have an ongoing charges figure (OCF), to give an indication of the cost of investing in a fund. We have outlined below the different charges you may face. If you have a relatively small portfolio of say, £50,000, a percentage-based charge will generally work out cheaper, while large portfolios fare better with a flat fee.
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