Managed Funds For Dummies by Colin Davidson

Author:Colin Davidson
Language: eng
Format: epub
Publisher: Wiley
Published: 2011-01-23T16:00:00+00:00

Chapter 11

Looking At Your Options: Taking Advice or Going It Alone

In This Chapter

Working out if you need advice

Dealing directly with fund managers

Using a managed fund broker

Taking advice from a financial planner

As with all investing, you have choices as to how to go about investing money in managed funds. You can make use of an adviser, typically a financial planner or a stockbroker, or you can invest yourself, either direct to the fund manager or via a specialised managed funds broker.

Figuring out how you should invest, by either using a financial planner or doing it yourself, should be more than just a result of trial and error. How much time, money, experience and investing confidence you have all play a part in making the right choice. The complexity of your financial situation may also determine how you deal with your money. Generally, the more complex your affairs, for example, when family trusts, self-managed super funds or business ownership are involved, the more likely that professional advice is appropriate.

You’ll find occasions, such as investing on behalf of a grandchild or saving to buy a house, when taking a DIY approach may be right. With a little planning and careful research you can end up with the investments you want and you can save money on fees, if you know how. This chapter explains the benefits and pitfalls of all the choices you have over how to go about investing in managed funds, and how and where to use each of them.

Examining the Best Route for You

Deciding how to go about putting money into a managed fund can be similar to the way people like to travel. Choosing the convenience of booking a tour where accommodation and the like is all laid on is one option. Another is independent travel. Researching your trip, booking accommodation and flights online and arranging your own sightseeing is part of the fun for many.

Investing in managed funds offers similar options — using a professional or going it alone. Both methods have their pluses and minuses. Much of the choice boils down to how much confidence you have as an investor and, also, how complex your finances may be.

Looking at your options

You can choose from three main ways to invest in managed funds, with different levels of service from each and, of course, different levels of fees:

Fund manager: You can deal directly with a fund manager. Investors can call the office or visit the manager’s website and deal direct. If you can work out what fund you want and you’re happy with the manager, this is a good option.

Managed fund broker: Most of these brokers generally offer a rebate of some of the fees charged on managed funds. Usually, managed fund brokers rebate the contribution fees — which can be anywhere up to 4 per cent or more of your investment — charged by fund managers. A great option if you want to invest yourself and are looking for the lowest fees.

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