Private Banking and Investing charges

fonsde

Hi guys,

I have a few questions about private banking and mutual fund charges.

In my home country my family has saved a fair amount of money (500k euro) and have access to private banking. When they deal with funds the bank is charging them 0.6% for bond funds and 1.5% for equity funds. No other charges.

When I look at fund factsheets a lot of them have inital charge x%, on going charge y% etc.
However this doesnt seem to apply when you have access to private banking.

If I were to register for investing in the UK (normal investor <100k) would all the charges mentioned above apply?

Also is it the same when you have over 500k and have access to private banking? Does anyone know the specifics ?

Thanks

dunstonh

If I were to register for investing in the UK (normal investor <100k) would all the charges mentioned above apply?

Generically, you would have fund charges and product/provider/platform charges and adviser charges. All three would be disclosed separately.

Also is it the same when you have over 500k and have access to private banking? Does anyone know the specifics ?

Private banking investment arms tend to be expensive and have high staff turnover and are best avoided. If you really want a discretionary investment service then using one not from a bank is usually best. However, most investors needing investment advice would be best placed getting it from an IFA. Whilst some IFAs may recommend a discretionary investment service, others will not and will use portfolios of funds.

fonsde

I am confused about the charges.
Lets take YouInvest platform. It looks they charge £5 per trade, free to open an account, and a 0.2% per annum on funds you hold with them.

Then when I look at the availalble funds, they list the following charges: (eg)
Actual Initial Charge 2.00%
Exit Charge 0%
Fund Ongoing Charge 0.79%
AMC 0.75%

Are all the above represented in the NAV price of the fund?
Then I only would pay £100 + 5 + 2 to buy £100 worth of shares?
+ £0.2 per annum to hold the fund

dunstonh

Most funds nowadays do not have initial charges. Some exceptions and some may have small spreads but many are mono charged (annual charge only).

Ignore the AMC. it is the ongoing charge that matters.

Are all the above represented in the NAV price of the fund?

The ongoing fund charge is reflected in the unit price and is effectively taken on a 1/365th basis.