The Daily Telegraph - Your Money - - YOUR MONEY - Tele­graph Money­has Tele­graph Money­has Laura Suter

While fund costs are fall­ing, the ben­e­fits can be wiped out if you use the wrong bro­ker to trade your funds or shares.

Your choice of “fund shop” is key, as their costs vary. Pick­ing the wrong one could cost you thou­sands. But se­lect­ing the right one is not easy.

The amount you pay de­pends on your level of as­sets, the amount you trade and what you are buy­ing.

a wealth of

in­for­ma­tion on the best fund shop for your Isa or self-in­vested per­sonal pen­sion (Sipp).

Our fig­ures, com­piled by Lang Cat, a con­sul­tancy, as­sume that in­vestors have 80pc of their money in funds and 20pc in shares and that in­vestors make four fund switches and two share trades per year.

The anal­y­sis shows that for an in­di­vid­ual with £20,000 in­vested, the cheap­est op­tions are Close Broth­ers, Fi­delity Per­sonal Investing or TD Di­rect Investing, which cost 0.34pc, 0.35pc and 0.36pc a year re­spec­tively, on top of the funds’ charges.

The most ex­pen­sive at this level are the Share Cen­tre at 1.14pc and iWeb at 1.25pc. The dif­fer­ence be­tween the prici­est and cheap­est is £182 a year.

For some­one with £500,000 to in­vest, the cheap­est op­tion is In­ter­ac­tive In­vestor, which charges just 0.02pc, equiv­a­lent to £100 a year. This is also the cheap­est plat­form for those with £100,000 to in­vest.

The most ex­pen­sive plat­form for those with £100,000 or £500,000 is Har­g­reaves Lans­down, which charges 0.32pc, or more than £1,500 on £500,000.

Holly Mackay of Bor­ing Money, a fi­nance web­site, said: “If you have up to about £70,000, a per­cent­age fee will usu­ally be cheaper. Once you start get­ting into the £100,000-plus league, fixed fees will typ­i­cally be cheaper.”

Price is not the only con­sid­er­a­tion for in­vestors, how­ever. Lev­els of cus­tomer ser­vice vary be­tween fund shops, as do the amount of in­for­ma­tion they pro­vide and the us­abil­ity of their sys­tems.

In­vestors also need to be aware of the dif­fer­ent charges for dif­fer­ent in­vest­ments.

Typ­i­cally buy­ing funds on plat­forms costs one amount while buy­ing in­vest­ment trusts, which are shares listed on the stock mar­ket, costs a dif­fer­ent amount.

heard from read­ers who have switched from investing in unit trusts into in­vest­ment trusts in or­der to slash their costs.

Cus­tomers of the more ex­pen­sive fund shops can switch, al­though this of­ten costs money, or they can try hag­gling with their ex­ist­ing firm.

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