Five Questions About: Platforms

 

Is this something to do with train stations?

No. Nor is it anything to do with shoes. Platforms are essentially online fund supermarkets where you can buy and sell different unit trusts, investment trusts and shares. They can be really useful if you've built up some tax-free savings in ISAs.

So they're like an investment marketplace?

You could say that. They allow investors to easy move in and out of different funds and have them all grouped in one place, so they can see at a glance what holdings they have and how they're doing.

That sounds expensive.

Not really. Scales of economy allow platforms to offer their service fairly cheaply, normally for a percentage of your investment. However the way they charge is changing. Instead of taking a cut from investment firms, the trend is to charge you a straight fee. That's the approach taken by the newly launched Charles Stanley Direct, for instance.

Does that mean it will be easier to compare different platform charges?

In theory, yes. But not yet as firms are waiting to hear about new rules about commission and charges from the Financial Services Authority, expected in March.

So is there an easy way to compare now?

A website called www.comparefundplatforms.com does a decent job, although not all platforms are included yet and one leading one has refused to provide data.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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