Change to No Trail class investment?

Goodadvicealwayswelcome

Hi all, I have a Regular Invesco Savings plan of standard accumulation shares. The company are using different Servicing Agent so all new share purchases will be to No Trail class. can convert my existing investments the equivalent cheaper class also. What impact this on investment? Is it good idea or not? thank you in advance for your help..

dunstonh

The retail distribution review banned the sale of commission share classes in 2013.    If you invest direct with the fund house, the no-trail version is still a commission share class.  It just removes the ongoing trail but retains the platform commission equivalent.

Invesco were often used on regular contribution plans as they had a small contribution limit lower than most of the platforms.  You could do £20+ with Inv Perp.   So, that is how they often got these plans.   Once you were £50+ there was no point using them but going with a platform instead.

 What impact this on investment?

Its just a different share class. The underlying assets are no different.

Is it good idea or not?

Its better than the trail version but not as good as the full clean share class.

Goodadvicealwayswelcome

Thank you for your prompt reply dunstonh.  Please advise what the full clean share class is? Sorry, I'm a bit of a novice.

dunstonh

Goodadvicealwayswelcome said:

Thank you for your prompt reply dunstonh.  Please advise what the full clean share class is? Sorry, I'm a bit of a novice.

The clean share class has no commission of any type.    The no-trail share class still has a commission that is paid to the platform/provider (in this case, they are paying it to themselves).    The annual charges include a cost that covers the commission.      

Modern investing removed all commissions (in most cases) and you pay explicitly for each part of the administration cost.   e.g. platform charge 0.25%, fund charge 0.25% and adviser charge 0.50%. = 1.0%  (figures are typical ballpark examples).  If you dont use an adviser, you dont pay the adviser charge.    If you use an expensive platform you may pay 0.45%.   If you use a cheap platform, you may pay 0.15%.    

The "unbundling" of charges and removal of commissions allows you to pick your provider/platform, adviser or no adviser and fund(s) without any commission in them so lower cost than with commission.

You are still investing via the fund house, which is the old fashioned way.  If you still wish to continue that then the no trail version is as good as it gets.   

Alexland

This might be a good prompt to review this investment to determine if it still meets your needs and if better options are now available.