89m wasted on investment fund charges
The amount of money people are wasting by investing in funds directly with fund management groups appears to be increasing.
15:01 05 January 2005
The amount of money people are wasting by investing in funds directly with fund management groups appears to be increasing, according to Bestinvest Brokers.
Research by Bestinvest reveals that in the year to October 2004 individuals may have wasted 89 million or more by paying full initial charges when directly investing with fund management groups instead of utilising brokers.
This marks an increase of some 13 million for the 12 months to the end of October 2003.
Around ten per cent of all unit trust/ oeic investments were made directly, up from 9.6 per cent in the previous 12-month period. Also, Stocks & Shares ISA fund investments made directly rose from 21.8 per cent to 25.3 per cent.
Justin Modray, Bestinvest Head of Communications, commented: "I am surprised that the proportion of money being invested directly is increasing given investors normally face the full brunt of initial charges with no advice via this route.
"By simply transacting through a broker who rebates commissions these investors could save a small fortune, typically 210 or more on a 7,000 fund-based ISA investment."
Dominic Cummings, Bestinvest director, urges investors to think twice before investing direct or via advisors. "It is important for investors to be clear as to the options available to them if they are to get value for money," he added.