Why accept higher costs on your savings than you would in your local supermarket?

It is a strange phenomena that we will walk the streets of our town looking for the best bargains yet will accept the costs built into our savings plans without question.

From the start of this year, there has been a fundamental change in the way that you and I are asked to pay for the financial services we receive. Advisers no longer take commission but will charge a fee for the services they offer.

However, your existing plans will have servicing costs built into them and you may not necessarily be receiving service from the adviser or fund manager who is receiving the fees that those charges reflect.

Indeed, many advisors and investment houses recognise that those charges could come down as they are not bringing better value.

This is not small beer! Typical charges can be between 1.5% to 2% or more per year and thus reduces the growth on your investments and depletes your investments further when values are falling. When you consider that you could achieve the same results paying only 0.5% or less, reducing costs by 2/3rds or more can save you £1,000s over the years.

Don’t get me wrong. Advisers and fund managers who provide a service which delivers value to you should be paid for what they do but you need to be aware of what that fee is and what it is for.

This is your money that is being spent possibly without you even knowing about it. In these times, every penny needs to count. Go and ask your savings providers what annual charges are being deducted. If you need help with this, give me a call.