An investment platform, sometimes known as a ‘wrap’, master trust or investor-directed portfolio service (IDPS) bundles together a range of managed funds and investments as a single product.
All the administration, tax and reporting is consolidated – and simplified.
People may choose to invest through platforms to gain access to a range of investments across all of the major asset classes – shares, property, cash and fixed interest.
You can often access wholesale managed funds via a platform that are otherwise not available to investors with less than $100,000 to invest.
According to Rice Warner’s Personal Investments Market Projections 2017 report, wrap-style products have nearly doubled in funds under management over the past five years.
When considering an investment platform, things to look for include past performance, how easy it is to use, reporting capabilities and, of course, fees.
Indeed, differences in fees can make a significant difference to returns over time.
What can you do?
It’s important to compare apples with apples.
To do this you’ll need to compare the total fees for the platform with identical investments and then you will see which is cheaper.
This is because not all fees are the same. When you invest through an investment platform there are three main types of fees:
Administration fees – the fees the platform charges to run the platform
Investment fees – the fees charged by fund managers to manage your money
Advice fees – the fees the platform collects on behalf of your adviser
Investment management fees are not usually charged directly.
Instead, they are deducted from the investment earnings before the unit price (or value) of the investment is struck.
In some instances, the fund manager will pass some of their fee back to the platform provider.
The platform provider may choose to lower the administration fee or keep the rebate.
Unlike some platforms ifsinvest – which is brought to you by Industry Fund Services – passes all rebates that we receive from fund managers straight back to investors in full.
While product disclosure has improved markedly in recent years, perplexingly platforms still have no requirement to disclose these rebates they receive from fund managers.
Advice fees are collected by platforms and passed through to your adviser with your agreement.
In some cases the platform may not collect this fee.
This might occur if, for example, you have chosen to pay your adviser from off-platform funds.
It is worth noting that nearly all major platforms require that you are introduced by an adviser – in other words you can’t access the platform as a direct client.
With ifsinvest, you don’t need to have an adviser to access our platform. That’s right, we accept direct investors so you pay no advice fees.
ifsinvest is brought to you by Industry Fund Services, which is wholly owned by 27 leading industry funds.
Contact Industry Fund Services on 1300 734 496 or click here to find out more about ifsinvest, or to request an information kit.
All investments carry risk. Before deciding to invest, you should consider the following key risks:
• The value of investments will vary. You can lose money as well as make money.
• The level of returns will vary, and future returns will differ from past returns.
• Returns are not guaranteed and investors may lose some or all of their money, and
• Laws change.
OneVue Wealth Services Limited ABN 70120380627 AFSL308868 (OneVue) is the product issuer of ifsinvest. Industry Fund Services ABN 54 007 016 195 AFSL 232514 (IFS) has entered an arrangement with OneVue to make ifsinvest available to you. IFS receives fees for its services.This information has been prepared by IFS as promoter and distributor of ifsinvest. It contains general information and does not take into account your personal objectives, financial situation or needs. We recommend that you consult a financial adviser if you require financial advice that takes into account your personal circumstances.
It is important before deciding whether to invest that you read the Disclosure Documents and consider whether ifsinvest is suitable for you. A copy of the Disclosure Documents can be obtained by calling 1300 734 496 or from the Documents and Resources tab of ifsinvest.com.au