Should I Switch to get Lower Charges?

Financial Chat
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I read a recent thread, “which stocks and shares app is best?”, with interest as it alerted me to the fact that I may be paying too much in charges for my investments

I have two main providers, let’s call them A and B. In A my cash is divided into two funds, the annual charges are 1.47 and 1.4% respectively. In B my cash is spread over multiple funds and the charge is 0.5% service charge plus 1.09% overall total fund charges (from latest annual statement)

Returns for A over last three years: 4.4%, 4.6% and 3.5%.

Returns for B over last 4 years -2.6%, 21.4%, 1.9% and 6.6%.

These periods will be from a date during the year, not calendar years.

I’m tempted by the “invest in the whole market” strategy but not sure how to figure out if I would be potentially better off doing so.

If I am looking at the correct data is seems VWRL over the same period was -2.23%, 7.98%, 23.98% and -9.62%

These will be for calendar years to not an exact comparison.

I am able to switch funds with provider B (not sure about A) at no charge. For example, their charges for Vanguard FTSE UK All share Index Unit Trust are 0.08%. It does say in the description “This fund charges one fixed fee” and I am not clear about this when they also quote a percentage.

Any advice is most welcome and appreciated.

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Before you do anything. Read the first few chapters of https://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Financial/dp/0273785370/ref=sr_1_1?keywords=tim+hale&qid=1557328116&s=gateway&sr=8-1 in terms of putting together a passive fund and the reasons for doing so, it will be the best money you’ll ever spend.

Be aware that the FTSE 100 UK is UK only, for whole of market you’d be better looking at the global all cap - available through Freetrade with no additional fees, or something like Vanguards Life Strategy fund. Both of which have much lower fees then you are currently experiencing.

Whilst you have experienced some good (great!) returns recently, be aware that this does average out over the longer term and the charges will severely effect your compounded interest rate.

I’m assuming these are Robo advisors?

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Thanks, will read that. Not sure what defines a Robo advisor but the investments were put together by our fnancial advisor when I was still working.

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You can invest in both VWRL and FTSE UK All Share with 0 fees on Freetrade, or £3 per month if you want an ISA.

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1.4% fee? That’s crazy.

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When you say zero fees I assume you mean fixed fees? I see there is a fee of 0.25% with Freetrade for the “Vanguard FTSE All-World UCITS ETF” whereas provider B has a fee of 0.24% plus a fixed fee for “Vanguard FTSE Global All Cap Index -U (Inc/Acc)” fund. Are these the same funds as the description is slightly different?

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Freetrade themselves charge nothing. As far as I know, the 0.25% is a fund fee charged by Vanguard, which is reflected in the share price. To my knowledge, there is no way to get around the 0.25% fee with any provider as it is a charge for the fund.

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You can’t get away from fund fees, you can reduce fund fees by going for a fund you like with lower fees. Some platforms also have discounts on fund fees.

Freetrade while free for a standard account is currently £3 a month for an isa account which you would want long term.

@Tulloch those are two different funds, Freetrade doesn’t have the global all cap fund. You can read the fact sheet for both to see how they differ.