Income And Growth Survey: If you're really sure...

Discount brokers can save you money - if you know your stuff.

BEING CAUGHT between the twin aims of income and growth can leave investors dizzy trying to find the right investment opportunities. If this rings any kind of bell with you, then it's time you made tracks for a financial adviser - someone who can explain what the different funds can offer, and how much risk they represent.

But if you know which investment you want to put your cash into, there's no need to pay for what can be expensive advisers. Instead, you can simply use a discount broker.

These are execution-only firms which will buy products for you saving you the cost of paying for someone's expertise. Even better, they can save you more money by rebating any commission paid out by the product providers.

The commission could be around 3 per cent, which on the maximum pounds 6,000 you can invest in a PEP amounts to pounds 180.

"There are a lot of people who don't realise this service exists and could benefit substantially from using a discount broker," claims Alan Penny, chairman of brokers Financial Discounts Direct. "If you know which product you want and from whom you wish to buy it, you can get the commission rebated back into your pocket or investment."

But if you end up in the wrong product you'll only have yourself to blame - and it could well be a costly mistake. "If you look at the mass of PEPs that have recently come on to the market, a consumer's going to find it very difficult to make the right choice," warns Simon Holt, managing director of IFAs Skipton Financial Services.

"This is especially true at the moment when there's just a limited time scale to buy a PEP. It's true investors could save 2-3 per cent up front by going to a discount broker, but choosing the wrong PEP could cost them dear," says Mr Holt.

"You've got to be absolutely certain in your own mind that you're able to do all the research that a qualified IFA can do, if you're going to use a discount broker."

There are a number of discount firms around and charges vary which means it's worthwhile shopping around. The amount of commission rebated also varies, so it's worth checking what share a discount broker will offer you.

Companies such as Hargreaves Lansdown and PEPwise charge no fee for investing your money in a PEP and fully refund any commission they receive. They actually make their money from the renewal commission they receive from the PEP provider in later years. Other discount brokers, such as The Pep Superstore, which is part of Chelsea Financial Services, splits the commission with customers while others, such as PEPDirect, refund all commission to the customer but charge a flat fee.

Another reason to consider discount brokers is that they may be able to negotiate unique deals for customers. Alan Penny says: "We can negotiate special deals with product providers and reduce the price still further."

Some IFA firms will offer you a choice of a cheaper execution-only service, or the more expensive advisory service. But, again, they warn of the dangers of choosing the cheaper route. "We offer discounts to those who know exactly what they're talking about," says Andy Harris, director of Maddison Monetary Management.

"If you've got the time to research the market then taking the discount is appropriate. But even confident investors should be wary. The market changes and new products appear and it's likely that only through a qualified adviser will people be able to ensure that they have the best products for their own needs. The fact is that most people aren't equipped to make the decisions for themselves," says Harris.

Anyone making their own investment decisions should ensure they read the small print of any product and understand the risks involved."

Financial Discounts Direct 0500 498 477 (the company offers a free `Guide to Buying Financial Products'); Hargreaves Lansdown 0117 988 9880; Pepwise 0345 573277; The Pep Superstore 0171 3516022; PEPDirect 0800 413186; Maddison Monetary Management 0800 074 2233

Alternatively, try the ISA Shop, which has dozens of PEPs to choose between, from its own comprehensive (and free) 64-page guide. Call 01777 839205

Suggested Topics
Sport
Brazilian fans watch the match for third place between Brazil and Netherlands
world cup 2014Brazil 0 Netherlands 3: Dutch pile on the misery in third place playoff
Sport
Robin van Persie hands his third-place medal to a supporter
Van Persie gives bronze medal to eccentric fan moments after being handed it by Blatter
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
'Deep Breath' is Peter Capaldi's first full-length adventure as the twelfth Doctor
TVFirst episode of new series has ended up on the internet
PROMOTED VIDEO
News
Ian Thorpe had Rio 2016 in his sights
people
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
Monkey business: Serkis is the king of the non-human character performance
peopleFirst Gollum, then King Kong - now the actor is swinging through trees in Dawn of the Planet of the Apes
Arts and Entertainment
Blackman: Landscape of children’s literature does not reflect the cultural diversity of young people
booksMalorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
Voices
Mrs Brown's Boy: D'Movie has been a huge commercial success
voicesWhen it comes to national stereotyping, the Irish know it can pay to play up to outsiders' expectations, says DJ Taylor
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Life and Style
Once a month, waistline watcher Suran steps into a 3D body scanner that maps his body shape and records measurements with pinpoint accuracy
techFrom heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
News
Soft power: Matthew Barzun
peopleThe US Ambassador to London, Matthew Barzun, holds 'jeans and beer' gigs at his official residence. He says it's all part of the job
Sport
Joe Root and James Anderson celebrate their record-beaking partnership
cricketEngland's last-wicket stand against India rewrites the history books
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?