If you invest in ‘open-end’ funds (such as unit trusts), we have good news – your costs are likely to drop over the next few years. That’s because the ‘trail commission’ payments made by fund managers to brokers (which ultimately come out of the money you’ve invested) are being banned.
Instead, brokers will charge you directly for looking after your money, and this will be both more transparent and less expensive than paying the broker indirectly via commission. It’s about time – as we’ve often noted here at MoneyWeek, unit trusts have rarely represented the best-value way to invest.
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