Back in the day the standard practice was to invest your money into funds such as unit trusts by completing an application form and sending it to the investment manager together with a cheque in the post. You had no idea when the application would be received by the manager and therefore when your money would be invested. The only confirmation of this happening would be when you receive your contract notes in the post some time after.
It was also standard practice, and still is for many, for the investment manager to charge up to 6% initial commission. So for every £10,000 you would actually have £9,400 invested. If you invested through a broker or financial adviser they would typically receive 3%, or £300, out of that £10,000 investment before the money is even invested.
Nowadays the story can be quite different. I say can be because it is not necessarily so. Most investments you make will still follow the same process as above.
However it does not have to be that way. These days you have discount brokers such as Investor Profile that provide a fully automated system that allows you to invest online, safely and securely, quickly and easily. There is the minimal of effort involved in making your application.
You have what is called a fund supermarket to go shopping in. That means rather than only being able to choose from the fund range of a particular investment manager, on a system such as that provided by Investor Profile you can choose from funds provided by all sorts of different fund managers, all in one place, then continue to view your various holdings in one place. A fund supermarket such as this can hold as many as 1500 funds for you to choose from.
You would think that for this added ease of use and flexibility of choice that the broker/financial adviser is finally earning their money. But in fact the new breed of online investment providers actually discount the initial commission you pay.
Investor Profile does not believe you should pay such high initial commissions so promise to not take any initial commission at all. That’s 0% commission to Investor Profile every time you invest. That’s because we believe you should have more money invested at the beginning because this is proven to help you earn more in the future.
So when considering how, when or with whom to invest the benefits of investing online are compelling and indeed changing the industry. For years the investment managers have been creaming off money every time people invested in their funds. Now the good guys are coming to town and they’re here to help you do the right thing so that you can benefit for years to come.
Jaskarn Pawar, Director, Investor Profile Ltd
If you are a UK investor with ISA, Personal Pension or Unit Trust investments then Investor Profile’s free online investment monitoring service could be what you need.