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  • FIRST POST
    • slpj
    • By slpj 5th Feb 18, 6:30 PM
    • 51Posts
    • 19Thanks
    slpj
    Investment fund charges confusion.
    • #1
    • 5th Feb 18, 6:30 PM
    Investment fund charges confusion. 5th Feb 18 at 6:30 PM
    Hi there,
    I have a number of investments in funds with 3 different companies. They are all in ISA wrappers. When looking at the unit prices, depending on where I look, I get different prices. This is related to the 'class' of shares or units I hold.

    I have "A" class and "R" class, all in "Acc" type units/shares, which I understand are called "bundled". But I see that there are now also new "I" classes or "Clean" unbundled classes too, that have significantly lower annual admin charges than the A and R class units that I hold.

    So I did a little more research, and found this ------
    "The Financial Conduct Authority (FCA) in 2014 banned the payment of trail commission by fund managers to investment platforms. Previously, investors had to pay for this commission through the fund’s annual management charge (AMC). When the commission was banned, fund managers had to introduce ‘clean’ share classes – funds with no commission levied on them. In general, removing commission resulted in the fund’s AMC being lower. To make up the commission shortfall platforms introduced a platform fee that investors have to pay – it usually ranges from 0.25% to 0.5%.
    Why haven't old funds been removed?
    Fund managers and platforms were given a deadline of 6 April 2016 to either convert investors to the new clean share class or to ensure the commission gained from the old ‘bundled’ funds was passed on to the client, rather than the platform, through rebates."

    But I hadn't been told about this. Were the fund managers who hold my funds supposed to advise me before the end of 6th April 2016, that I could change to these new 'clean' classes? Am I supposed to have been offered/given a rebate of some kind?

    I'm completely confused by this. Can someone please advise?

    Thanks in advance.




Page 1
    • jimjames
    • By jimjames 5th Feb 18, 7:44 PM
    • 12,652 Posts
    • 11,318 Thanks
    jimjames
    • #2
    • 5th Feb 18, 7:44 PM
    • #2
    • 5th Feb 18, 7:44 PM
    It would help to know which platform you are on and which funds? Either scenario could have happened, all of mine were converted but I believe some platforms just rebate the commission
    Remember the saying: if it looks too good to be true it almost certainly is.
    • dunstonh
    • By dunstonh 5th Feb 18, 8:05 PM
    • 93,032 Posts
    • 60,418 Thanks
    dunstonh
    • #3
    • 5th Feb 18, 8:05 PM
    • #3
    • 5th Feb 18, 8:05 PM
    But I hadn't been told about this.
    Did you need to be told? If nothing impacted on you, then there is nothing to tell.

    Were the fund managers who hold my funds supposed to advise me before the end of 6th April 2016, that I could change to these new 'clean' classes?
    If you were on a platform then you would have been told. If you were not on a platform then fund then telling you about platform charges would not make sense.

    Am I supposed to have been offered/given a rebate of some kind?
    If you are not on platform, then no. If you are on a platform that either a rebate or move to a clean share class.

    I'm completely confused by this. Can someone please advise?
    Are you investing with the fund house or on a platform?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • slpj
    • By slpj 6th Feb 18, 9:12 AM
    • 51 Posts
    • 19 Thanks
    slpj
    • #4
    • 6th Feb 18, 9:12 AM
    • #4
    • 6th Feb 18, 9:12 AM
    Hi there.

    Thank you both for those replies. I have held these investment since around 1997 originally as PEPs, but added to them in ISAs in subsequent years.

    In my limited understanding, I am not on a platform. Reading 2 of the statements, I am linked to a Financial Advisor and Agent. In both cases this is Elson Asscociates (EA) I don't know about the 3rd, as they do not name an agent or FA in the statments.

    I am invested in --
    Henderson European Selected Opportunities Fund A class Acc. FA/Agent is Elson Associates.
    Artemis Capital Fund Class R Acc. FA/Agent is Elson Associates.
    Invesco Perpetual European Equity Fund Acc. No agent or FA listed.

    I only get my statements from the fund managers above and have no communications with Elson Associates. So I'm a little unclear about how I am invested, directly or via an agent.

    Does this tell you enough to help me get a better understanding?

    Thanks.
    • dunstonh
    • By dunstonh 6th Feb 18, 9:40 AM
    • 93,032 Posts
    • 60,418 Thanks
    dunstonh
    • #5
    • 6th Feb 18, 9:40 AM
    • #5
    • 6th Feb 18, 9:40 AM
    As you are not on a platform with your investments, you are not impacted by changes to the platform rules.

    However, it may now be time for you to investigate moving your investments to a platform as its likely to be cheaper for you.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Linton
    • By Linton 6th Feb 18, 9:43 AM
    • 9,395 Posts
    • 9,529 Thanks
    Linton
    • #6
    • 6th Feb 18, 9:43 AM
    • #6
    • 6th Feb 18, 9:43 AM
    You would seem to be invested directly in a bundled class. It is charged at a higher rate to pay for the fund manager to manage your account and send out statements etc. You are not on a platform so no rebate is due. Elson are your agents and advisors in that, I guess, they can buy/sell your holdings on your behalf.
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