The Pensions Minister, Steve Webb, has launched a “full-frontal assault” on pension fund charges, proposing a cap on the management fees of certain new pension schemes. He points out that while management fees of small percentages sound low, they accumulate to become large sums of money over a lifetime.
The point he makes about the effect of charges applies to all long-term investment accounts, not just pensions. This is why we take management fees and other charges seriously and select companies to manage your money that seek to give you the benefits of investing, without eroding those benefits through high charges and fees. Their management fees are well below the lowest level the minister proposes in his consultation paper.
But this focus on fees and charges does not stop at the annual management charge which is only a part of the cost of investing. It covers the manager’s costs, but not the cost of trading shares, taxes and other expenses related to running investment funds. In funds where shares are traded in high volume, these other expenses can be surprisingly high.
The firms we select to manage your assets aim to minimise these frictional forces and reduce their impact. For example, their investment style means they trade very little and when they do it is with industry-leading efficiency.
We understand impact of fees and charges on long-term investment returns and see it as part of our job to minimise their impact on your wealth.