City traders’ fees hit savers and pensioners
City traders are depriving people with pensions or savings thousands of pounds through management fees. Charlotte Reid tells us how can you avoid the City traders and still be able to invest your money.
The Treasury is warning that city traders are leaving pensioners and savers worse off through charges, which are often hidden.
A source told The Observer that fund managers have “lost sight” of what their customers want.
The average fund manager makes it known that they are charging about 1.5% of the sum invested for their services. There are hidden services too, averaging 0.3% a year. The trading costs are another 1.4% of that investment.
This behaviour is also spreading. Charges have increased 9% in the last decade. As the economy struggled it made these practices more noticeable as it was easier to tell that more was being taken.
But can reforms be expected of the banking system?
Yes, but not for a while. George Osborne backed the Vickers Plan – a wide-ranging overhaul of the UK’s banking system.
Osborne said, “Our objective is clear. We want to separate high street banking from investment banking, to protect the British economy, protect British taxpayers and make sure that nothing is too big to fail”.
These preventions should stop a repeat of 2008 when major banks had to be bailed out.
However, there will be sometime to wait. The legislation isn’t due to be passed until 2014-15, with a full separation expected in 2019.
In the meantime, there are ethical and green funds available that will help to make a difference.
Clare Brook, fund manager for WHEB AM, said it is important to address the challenges that face the environment with their Sustainability Fund. She explained that these funds can make a good return whilst “helping the world move onto a more sustainable footing”.
If you want to look after your money and your planet then talk to your financial adviser, if you have one. Or fill in our online form which will connect you to someone who will help you out.
Picture source: altogetherfool
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