Platforms & Pensions
£ 149,543.48
– charges on a £ 500,000 portfolio with an OCF of 1.04 % over 15 years ( assumes 5 % growth p / a )
The right direction So , is this good news for saving more money ? The answer has to be yes , primarily due to cost , but it ’ s also a chance to rethink your investment strategy and check whether you ’ re making life unnecessarily complex by being hands-on . If the trend is for fund groups to offer low-cost , well-diversified solutions directly to the consumer , this puts pressure on platforms , which charge an extra layer of fees . Few fund groups currently offer a pension wrapper ( SIPP ), which is a major obstacle for many investors , but these will come soon . In conclusion , it ’ s tough out there and saving money is fashionable as well as practical . Ignoring the terrible investment performance we ’ ve all suffered from lately , it is possible to claw back some pounds and pence . Do you really need to pay more than 1 % a year to your fund manager unless you ’ re sure they ’ ll beat their benchmark year-in , year-out ? Look at passive funds – Trustnet is a great place to find out what ’ s highly rated and delivering consistent performance , and whether it is worth paying more than 0.2 % per annum to own . Look at your platform . Do you really need all that market commentary ? It all costs money and if you ’ re not benefiting from it , don ’ t pay for it . Use a platform-comparison service to keep tabs on costs and cheaper alternatives . It isn ’ t hard to move your investments and you can save tens of thousands of pounds . Finally , do you need a platform at all ? You may be able to invest in something simple straight from the fund manager . New investment services are coming out all the time . Give them a look , they may be cheaper and more suitable for your needs .
Issue 88 - October 2022 / 71 /