Barclays smart investor fees

Ybe

When you buy a fund in Barclays smart investor and tick include fees, does this include both the account fee and the fund management fee? Or is it just the fund management fee and you need to setup a separate direct debit for the account fee? 

wmb194

Ybe said:

When you buy a fund in Barclays smart investor and tick include fees, does this include both the account fee and the fund management fee? Or is it just the fund management fee and you need to setup a separate direct debit for the account fee? 

It includes the fees to purchase the fund. The fund management fee is taken from the fund itself, you don’t pay that separately. You pay Barclays’ account fees at a later date (quarterly? I forget.)

Ybe

wmb194 said:

Ybe said:

When you buy a fund in Barclays smart investor and tick include fees, does this include both the account fee and the fund management fee? Or is it just the fund management fee and you need to setup a separate direct debit for the account fee? 

It includes the fees to purchase the fund. The fund management fee is taken from the fund itself, you don’t pay that separately. You pay Barclays’ account fees at a later date (quarterly? I forget.)

Thanks. So say for example you invest £100 per month into the fund and the fee is £1 to buy. Then the fund management fee is taken from that too (let’s say £1 for simplicity). So essentially you’re buying £98 worth of the fund every month?  Then the account fee is charged separately through whatever payment mechanism you setup? 

Albermarle

Ybe said:

wmb194 said:

Ybe said:

When you buy a fund in Barclays smart investor and tick include fees, does this include both the account fee and the fund management fee? Or is it just the fund management fee and you need to setup a separate direct debit for the account fee? 

It includes the fees to purchase the fund. The fund management fee is taken from the fund itself, you don’t pay that separately. You pay Barclays’ account fees at a later date (quarterly? I forget.)

Thanks. So say for example you invest £100 per month into the fund and the fee is £1 to buy. Then the fund management fee is taken from that too (let’s say £1 for simplicity). So essentially you’re buying £98 worth of the fund every month?  Then the account fee is charged separately through whatever payment mechanism you setup? 

That is how many investment platforms work. Although no fund will charge 12% pa, so in fact in reality you will be buying more like £98.95 each month.

Stargunner

Barclays don’t charge fees to buy funds. They only charge the management fee  which they charge monthly.

Ybe

Thanks. If wanting to start small, Is starting with £500 and adding £50 every month a good way to start with investment? 

Albermarle

Ybe said:

Thanks. If wanting to start small, Is starting with £500 and adding £50 every month a good way to start with investment? 

When saving or investing for the future, anything is better than nothing.

However investing £600 pa is not going to enough to build up a decent retirement pot, but if your objective is to buy a second hand car with it in 10 years then it is enough.

Have you any other savings/pension ( at work ?) ?

Ybe

Albermarle said:

Ybe said:

Thanks. If wanting to start small, Is starting with £500 and adding £50 every month a good way to start with investment? 

When saving or investing for the future, anything is better than nothing.

However investing £600 pa is not going to enough to build up a decent retirement pot, but if your objective is to buy a second hand car with it in 10 years then it is enough.

Have you any other savings/pension ( at work ?) ?

Yes I have a pension pot with my employer as well. This is just a long term investment I want as a spare savings pot. 

Alexland

Ybe said:

Thanks. So say for example you invest £100 per month into the fund and the fee is £1 to buy. Then the fund management fee is taken from that too (let’s say £1 for simplicity). So essentially you’re buying £98 worth of the fund every month?  Then the account fee is charged separately through whatever payment mechanism you setup? 

The ongoing fee deductions get bigger over time as the account/fund valuations increase with new contributions and investment growth. After a few years once the valuation gets big enough you might find that a surprisingly high % of your regular contribution is going on covering the recurring fees for the amount already invested.

Ybe

Alexland said:

Ybe said:

Thanks. So say for example you invest £100 per month into the fund and the fee is £1 to buy. Then the fund management fee is taken from that too (let’s say £1 for simplicity). So essentially you’re buying £98 worth of the fund every month?  Then the account fee is charged separately through whatever payment mechanism you setup? 

The ongoing fee deductions get bigger over time as the account/fund valuations increase with new contributions and investment growth. After a few years once the valuation gets big enough you might find that a surprisingly high % of your regular contribution is going on covering the recurring fees for the amount already invested.

How do you deal with that? Is it still better than putting the same amount in fixed rate savings? 

wmb194

Ybe said:

Alexland said:

Ybe said:

Thanks. So say for example you invest £100 per month into the fund and the fee is £1 to buy. Then the fund management fee is taken from that too (let’s say £1 for simplicity). So essentially you’re buying £98 worth of the fund every month?  Then the account fee is charged separately through whatever payment mechanism you setup? 

The ongoing fee deductions get bigger over time as the account/fund valuations increase with new contributions and investment growth. After a few years once the valuation gets big enough you might find that a surprisingly high % of your regular contribution is going on covering the recurring fees for the amount already invested.

How do you deal with that? Is it still better than putting the same amount in fixed rate savings? 

Transfer your holdings to a cheaper broker e.g., iWeb doesn't charge an account fee.