Common questions

What are all the different types of charges on investments?

Charges are an area where the financial services industry seems to go out of its way to make things confusing. We try to keep our charges as simple as we can.

Here are some types of charges to look out for:

Charge Description Applies to Smarterly?
Platform charge Payable to the provider(s) of the platform you use to invest. Usually a percentage per annum of the value of your investments Yes
Fund manager charge Payable to the fund managers of the investments you choose. Usually a percentage per annum of the value of your investments Yes
Switching charge Deducted whenever you switch funds. Usually a fixed amount or a percentage of the value of funds switched. No
Initial Charge Usually a percentage of any amount you invest, deducted up front No
Dealing charge Deducted whenever you deal directly in shares. Usually a fixed amount per deal. No
Performance fee Payable to the fund managers dependant on performance. Usually triggered if the fund outperforms a particular benchmark by a certain amount No
Custody charge An extra charge made for certain types of investments. Usually a fixed amount per quarter. No
Payment charge An extra charge applied if you want to pay in certain ways (eg via CHAPS). Usually a fixed amount. No
Withdrawal charge (sometimes also called Exit Charge) Deducted when you cash in all or part of your investment. Usually a fixed amount. No
Transfer charge Deducted if you want to transfer your ISA to a different manager. Usually a fixed amount. No
 
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