Up-to-date investment advice in a rapidly changing financial market may be a way to help you get the best returns from your investments.
However, with changing rules on trail commission we need to ensure that all investors are able to gain access to regular investment advice to avoid losing out.
Many investors receive continuing advice on their investments through a financial advisor.
When you buy an investment product you will usually be charged an up-front commission fee which is paid when the money is invested on your behalf.
After that many products will charge an annual commission fee, known as trail commission, which will be taken out of your investment fund in return for which you should receive an annual review of your investment from a qualified financial advisor.
The Retail Distributions Review which is due to come into effect in December 2012 could mean that trail commission as we know it will go, and instead of paying a regular commission that amounts to a percentage of your investment, you will pay an up-front fee to pay for advice.
Financial advisors will be obliged to set out fees clearly when the investor buys a product, making charges more transparent.
Financial advisors will also be expected to deliver a higher level of service to investors.
While greater transparency on charges to the investor and a better service can only be a good thing, the new system does have its drawbacks.
Charging an up-front set of fees for advice may mean that those that have less to invest could end up paying more.
Under the current system the amount taken is a percentage commission, which means that the bigger your investment the more you pay.
The concern is that in the new system all investors will be changed a similar amount, driving costs up for smaller investors, deterring them from taking investment advice altogether.
Currently, when you make an investment there will typically be a 0.
5% (which can rise to as much as 1.
5%) annual trail commission on your investment fund.
If you are being charged trail commission already, you should ensure that you are getting the most for your money and that you actually receive the financial service that you are paying for.
Trail commission has often be criticised for not providing investors with adequate investment advice in return for the commission fee.
The trail commission system has also been linked to a number of misselling scandals, but the essential concept of delivering regular investment advice updates for a percentage fee still has its benefits.
Continually reviewing your investment is important to ensure that the way that your money is invested corresponds to your attitude to risk, your tax prospects and other personal preference factors, as well as ensuring that your investments get the very best out of the current market.
A financial advisor may be able to help you to keep a better tab on your investments.
With new rules on the horizon we need to make sure that even the smallest of investors is not discouraged from taking advice if they feel they need it.
However, with changing rules on trail commission we need to ensure that all investors are able to gain access to regular investment advice to avoid losing out.
Many investors receive continuing advice on their investments through a financial advisor.
When you buy an investment product you will usually be charged an up-front commission fee which is paid when the money is invested on your behalf.
After that many products will charge an annual commission fee, known as trail commission, which will be taken out of your investment fund in return for which you should receive an annual review of your investment from a qualified financial advisor.
The Retail Distributions Review which is due to come into effect in December 2012 could mean that trail commission as we know it will go, and instead of paying a regular commission that amounts to a percentage of your investment, you will pay an up-front fee to pay for advice.
Financial advisors will be obliged to set out fees clearly when the investor buys a product, making charges more transparent.
Financial advisors will also be expected to deliver a higher level of service to investors.
While greater transparency on charges to the investor and a better service can only be a good thing, the new system does have its drawbacks.
Charging an up-front set of fees for advice may mean that those that have less to invest could end up paying more.
Under the current system the amount taken is a percentage commission, which means that the bigger your investment the more you pay.
The concern is that in the new system all investors will be changed a similar amount, driving costs up for smaller investors, deterring them from taking investment advice altogether.
Currently, when you make an investment there will typically be a 0.
5% (which can rise to as much as 1.
5%) annual trail commission on your investment fund.
If you are being charged trail commission already, you should ensure that you are getting the most for your money and that you actually receive the financial service that you are paying for.
Trail commission has often be criticised for not providing investors with adequate investment advice in return for the commission fee.
The trail commission system has also been linked to a number of misselling scandals, but the essential concept of delivering regular investment advice updates for a percentage fee still has its benefits.
Continually reviewing your investment is important to ensure that the way that your money is invested corresponds to your attitude to risk, your tax prospects and other personal preference factors, as well as ensuring that your investments get the very best out of the current market.
A financial advisor may be able to help you to keep a better tab on your investments.
With new rules on the horizon we need to make sure that even the smallest of investors is not discouraged from taking advice if they feel they need it.