If you want advice about which funds are right for you, you will need to go to a financial adviser. You will have to pay for this advice but it could stop you making expensive mistakes in the long run. Websites such as www.unbiased.co.uk and www.vouchedfor.co.uk can provide you with a list of advisers in your area.
If you want to make your own decisions, then the best way to buy, sell and hold funds nowadays is through a platform, whether you want to invest within an Individual Savings Account (ISA), or a Self Invested Personal Pension (Sipp), or direct.
Platforms are basically websites which act rather like a supermarket, enabling you to buy a wide range of funds managed by different companies. But instead of taking delivery of these investments, the funds stay in your account on the platform until you want to sell them or take your money out. Platforms also provide ISA and SIPP wrappers.
You can still buy funds from some investment managers. Investment trust shares, for example, can still be purchased from companies such as Aberdeen, Baillie Gifford. Funds are still sold directly to investors by Invesco Perpetual and M&G. But many companies have stopped dealing directly with the public.
Pensions can still be purchased directly from insurance companies but may offer only a limited choice of investments.
Advantages of investing through a platform
Investing in funds through a platform has significant advantages and can work out cheaper than other routes.
- It means that you have a wide choice of funds from different managers. Access to other investments may also be available, such as investment trusts, shares, ETFs, corporate and government bonds.
- You can split your investment between different funds run by different managers but hold them together in one place.
- You can transfer existing investments into your platform account.
- This means you have a better overview of your finances and can monitor the progress of all your investments in one place.
- It is quicker to switch between funds when you want to make changes to your investments.
Choosing a platform
The next step will be choosing the right platform. There is a growing number available designed for investors who want to make their own investment decisions. They are run by a variety of organisations including stockbrokers, insurance companies, financial advisers and other independent organisations.
Although you won’t go too far wrong with any of them, try to do some homework in advance to find which might be the best for you. You can always switch to another platform in the future but this process can be expensive.
Platform costs are a significant consideration (see the guide on platform fees explained for more information), but it is also important to take other factors into account such as:
- Do you want to invest in funds only or have access to other investments, such as shares and investment trusts?
- Would you like to have research and model portfolios available to help you with investment selections?
- How user-friendly is the platform website?
- How easy is it to get in touch by phone if you have queries?