Stocks and Shares fund ISA charges

SallyG

http://www.ft.com/cms/s/0/1b8203f6-8eba-11e1-ac13-00144feab49a.html#axzz1tXEL4wz8

dunstonh

read the article carefully....

Ten popular Isa funds examined by wealth manager SCM Private advertised annual management charges of between 1.25 per cent and 1.75 per cent.

So, they are looking at the AMC and not the TER.

But when the full costs were taken into account, the research found that investors are actually paying up to 2.18 per cent a year.

Now they are looking at the TER and using the most expensive one and not a range as they did earlier.

SCM studied the ten best selling Isa funds as part of its campaign for “True and Fair” fund labelling and claims that funds still only publicise part of their total charges.

All funds publish their TER and most platforms now use the TER rather than the AMC in their documentation.

The rest of the article goes on to cover the different distribution costs. However, you expect differences as there is no monopoly and distributors (Retailers) are free to retail at the price they decide. Just like any other retailer.

Unbundling the charges does make things clearer. Although it can lead to more expensive charges for some people and it can make it more complicated for some (instead of having one charge covering everything they will have up to 3 charges or even multi-charges with discounts and offers or explicit charges etc)