Fund investment - avoiding initial charges

System

http://www.directinvest.co.uk/isa.php?cmd=fidelity

Hi Negs

The above is the link to fidelity from direct invest. It is in th Fund Supermarket area but I believe you can do an ISA or just a normal Unit Trust/ OEIC investment.

Martyn

System

......Enter the Fidelity website link on the bottom

Martyn
BULLNOTBEAR

allanhamer

Hi

I work for an authorised UK Unit Trust company based in Bolton (Marlborough Fund Managers Ltd http://www.marlboroughfunds.com ). Many people may not have heard of the company as it's small in comparison to the big players in the market such as Jupiter, New Star etc etc, however we have a few authorised UK unit trusts which have been attracting some good press articles recently and have a number of funds with good performance to back the press articles up. Tip 1 from me would be don't overlook some of the smaller companies in the market a few of them have some very good performing funds under their wing!! just because a company doesn't have millions to spend on marketing does not mean that they can offer any less than the big players in the market!! 8)

In so far as this topic goes you should be able to get some form of discount usually by going directly to the Trust Manager. Certainly in our case we do this as it means we dont have to pay commission or renewal to the IFA. Obviously some IFAs will do large volumes of business with us and as such will usually be given good standard terms by us. It really depends on how much you are going to be investing and whether or not it is a lump some with most fund managers.

Usuallly we may have terms with an IFA of 3-4% discount which they can choose to mix and match it how they see fit with their client. e.g. 2% discount passed on to their client and they take 2% as commission or 3% discount to their client and 1% commission they take themselves.

At the end of the day it also depends on whether you are an experienced investor or not.. what I mean is do you feel you require some form of financial advice or are you happy to do your own research?. A good site to look at if you are in to the peformance figures is http://www.funds-sp.com/registration_features.cfm they are part of the large Standard & Poors group which provide and collect a vast amount of fund data across the fund industry. They also operate a star * rating scheme that rates funds by a star rating between 1 and 5. 5 being better than a 1 star fund.
Lipper also operate a fund scoring system which can be found at http://www.lipperleader.com/GBR/en/index.html . Have a good read through press articles and look at fund performance tables. Above all think about your risk profile some funds are inherently more risky than others. For example a bond fund will in general because of its nature be lower risk than an equity fund which would be considered medium to high risk.
Also a lot of UK investors tend to have a very short terministic outlook on how long an investment should be held for. Personally you should consider any investment in a Unit Trust as a medium to long term investmen (10-25yrs). Dont expect huge returns over shorter periods of time 1-3 years.

The company I work for is Marlborough Fund Managers Ltd. This post is not an invitation to enter in to any deal with the said company nor does it constitute investment advice in any form.
The post expresses my own personal opinions and not that of the company. The only reason I give the company name is to give information on my own background.
Above all make sure you do your research investment decisions do not need to be rushed in to and you should always read a funds key features document and obtain a latest set of the funds managers report and accounts which can be obtained FREE OF CHARGE from all UK authorised fund managers. Visit a fund management companies website and do some reading up on the fund investment advisers or fund manager.

In so far as nominee accounts are concerned if the IFA is regulated by the FSA the client assets will be segregated from the companies own assets and in effect there is no chance of you losing your investment should the IFA go bust. You should find that ALL uk IFA's will be regulated by the Financial Services Authority (The FSA) http://www.fsa.gov.uk you can look on the FSA website to see if an IFA is on their records.

:edit the above paragraph does not mean the investment is guaranteed in any way all I meant was that whatever your investment is worth is safe should the company go down the pan so to speak

In so far as valueing your investment goes you should be able to get up to date fund prices from all major fund providers websites.  Some unit trusts operate on a dual pricing basis meaning there is a bid and an offer price. The price you get when you sell is the bid price or possibly the cancellation price.  A lot of UK based unit trusts operate on forward pricing which means that you will not know the price you are going to get for selling your investment until after you place the deal. There are now also a lot of single priced OEICs and Unit Trusts. Even though they quote a single price this price will usually have charges or a dilution levy applied to it so the end result will be you will get back less than what you calculate on the single price should you sell.

You can also usually find prices in the local press for some of the more popular funds. Failing that give the fund managers a ring and ask a lot usually operate local rate or freephone numbers.

Best of luck and should you need any further help please drop a post on here.


WARNING
Past performance is not necessarily a guide to the Future. The value of investments and the income from them can go down as well as up. you may not get back amounts originally invested.

aagoren

It doesn't matter which discount broker you choose, one thing is important:
Do not by directly from the fund manager (nor Fidelity nor Jupiter nor anyone)!!!
Just think: you charged £100 and invest £94.75 (assumng the initial charge is 5.25%). your money work harder. you need your fund grow about 5.55% before you'll see any profit - why???
go to discount broker and you lost 0.25% only from you investment - sometimes nothing.
Don't forget that 5% is sometime what your fund grow in a year.

Regarding Fidelity SS, defently it is one of the best funds, but it rank as high risk as a result of the nature of company it invest in.

allanhamer

ag

have to disagree with you there I'm afraid.

Some fund managers will give you a discount, sometimes it depends on the amount you are investing but dont not approach the fund manager directly as sometimes you can get a good discount.
Obviously if you get a better discount via a discount broker then go that way as ag says.

I understand to some extent what ag is saying as a lot of the larger companies dont really want to offer large discounts to private investors for some reason. Seems crazy to me as they could be turning business away but I guess they dont need the money ;D