What are fund platforms?
Fund platforms allow you to hold funds from a variety of fund managers in one place. This simplifies the holding and trading of a wide range of funds, particularly within ISAs and pensions. Some platforms also allow you to hold and trade in shares. It is important to note that fund platforms don't manage your investment just simply handle the admin required to hold your investments in one account.
What are the benefits of fund platforms?
Because you are holding your investments in a single platform account all your dealings and admin are carried out in one place, rather than with several fund managers. Fund platforms often have the added benefit of reduced charges which have been negotiated with the individual fund managers. As all your investments are in one place obtaining a valuation and switching between funds is simpler and quicker.
Can I invest in ISAs and SIPPs through a fund platform?
Most fund platforms provide the facility to hold your investments within 'tax wrappers' for both SIPPS and pensions.
What are the charges made by fund platforms?
The charges will vary between fund platforms and difficult to compare manually. To help with this comparison www.comparefundplatforms.com provide an excellent tool which compares fund platforms and discount brokers.
How safe are fund platforms?
If a fund platform collapses then your investments are covered by the Financial Services Compensation Scheme (FCFS) for up to £50,000. Your investments are held in a 'nominee account' which means that you are not the legal owner but are entitled to receive what your are owed.
Do fund platforms help monitor and analyse your investments?
A number of investment tools are often available to help maximise your investment performance.
- Valuation - all platforms offer online valuations
- Portfolio analysis - some platforms offer tools to help you analyse your portfolio, the more sophisticated can make suggestions based on risk, performance and how the funds invest.
- Model portfolios - suggested 'model' portfolios are available for a variety of different objectives
- Research - investors can benefit from good investment research and data which is available on some platforms
Choosing the right platform
Fund platforms can definitely make investing simpler and in most cases cheaper than investing with individual fund managers. As with must financial decisions you need to do your homework to find the fund platform that suits your needs and your pocket.
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