Avoidable costs of investing direct

Investors who are buying funds direct from fund management groups could be paying £100 million a year in unnecessary extra charges, says the Daily Telegraph.

If investors buy through a broker or adviser, they pay a typical 0.75% annual management charge for their funds, but if they buy direct they pay up to 1.5% a year, and on top of that can often pay initial charges of up to 5%.

Today, ‘wrap’ accounts and funds platforms enable investors to hold all their funds in one account, and the cost of owning funds like this is almost always lower than buying them direct from the fund firm. And with wrap accounts and platforms you can look up all your holdings online to see the latest values all in one place.