I have just bought a " Unit Trust Investment" with Legal and General and they told me it would cost me 1% per annum for it to be managed by them. I have just received the paper work from them and my first year will cost me approx. £574 if the interest rate is 5.5% in magagement fees.
Also after 5 years at approx 5.5% interest all i will make with a £6000 investment is £1100 i could a better return from my ISA, am i missing something here or have i been wrongly advised. Terribly confused, can anybody help me. thanks
2007-03-16 23:17:02 · 4 answers · asked by Audrey L 1 in Business & Finance ➔ Investing
My ISA are cash ISA's and at the moment their interest is 5.60% so there is no risk at all to them, thats why i am doubtful of this investment and i don't pay a management fee for the ISA as well, still worried!!!
2007-03-17 04:15:08 · update #1
I am not sure what you mean by "interest rate" as usually a Unit Trust investment is directly invested in equities, ie the stockmarket so performance would be dependent on that. The annual mangement charge (AMC) of 1% is standard however, don't forget that as well as the AMC that L&G charge, there could also be a fund management charge. L&G are one of the UK's leading insurers so you should be resassured by this. A lot depends on the fund you are invested in but your adviser should have discussed your attitude to investment risk before you made the investment to enable him to select the appropriate fund/s for your plan. Over the longer term, equity investments will outperform building society deposits but don't forget, there are no guarantees with this type of investment. By the way, Unit Trusts are identical to ISA investments - there is absolutely no difference in the investment itself. The only difference is that an ISA is placed in a tax free "wrapper". There are limits to your annual ISA allowance which you cannot exceed. If you have any queries, then talk to your adviser or Legal & General.
2007-03-16 23:29:41 · answer #1 · answered by Bexs 5 · 0⤊ 0⤋
Usually "Initial fee" of your unit trust investment is in the order of 5.5% of your total investment. After one year of your investment you have to pay annual fee of 1% of your investment valued after one year. This is the case when you buy it directly from the investment company (e.g. Legal and General). However, if you bought it from a Fund supermarket such as CoFunds or Funds Network through a broker (Bestinvest, H&L, etc.), you could reduce your initial fee to 1% or sometimess to 0%. If you make your puchase through brokers then your annual fee is also reduced to 0.5% or to 0.25%. The brokers make their money frm the commission they get frum the fund managers not from your investment. Therefore it is a bad thing to invest in ISAs and unit trusts directly through the investment firms. I do not understand your calculations and hope that the above explanation will clear up something for you. I hope this is helpful.
2007-03-17 08:32:41 · answer #2 · answered by East Ender 2 · 0⤊ 0⤋
you can buy a investment trust no fee at all similar to a unit trust
2007-03-17 05:01:43 · answer #3 · answered by j123g111 1 · 0⤊ 0⤋
you can cancel within X days of taking out the investment...GO and ASK!
2007-03-17 02:01:21 · answer #4 · answered by bluecow 5 · 0⤊ 0⤋