UK's first "charges-before-checkout" shopping basket for investors

rplan.co.uk announces its commitment to “total disclosure” by becoming the first investment brand in the UK to reveal all the charges and commissions investors will pay for an inve

Related topics:  Savings & Investments
Millie Dyson
4th April 2012
Savings & Investments
Andy Creak, Director rplan.co.uk, said:

“We’re bringing a touch of the amazon shopping experience to the investment world. Finding out about charges at point of purchase, after purchase or not at all does nothing to earn the industry the trust it needs, nor does it respond to the wishes of the majority of ISA customers that say they want charges and commission made clear before they make a purchase decision.”

Following a campaign supported by Which?, aimed at bringing greater transparency on fees levied to retail investors, rplan.co.uk is calling for all investment brands to fully disclose fees and commissions in pound terms before a customer makes a point-of-purchase decision.

Although most providers do disclose the charges as a percentage, it can be hard for customers to work out how much they pay in pound terms, and the information is never displayed at the point of purchase.

The move follows new nationwide research for rplan.co.uk, in which YouGov asked more than 2,000 people when in the buying process people would like to know fully about the charges and commissions they would pay for their ISA.

Key findings revealed that:

- 46% of stocks and shares ISA customers wanted charges and commissions to be clearly labeled when they were browsing online and before they had made any form of product selection. A further 11% wanted to see the charges and commissions made clear as they added products to their basket so they could see the extent of charges before they made a buying decision.

-  23% of respondents said they would expect to see charges and commissions clearly labeled by point of purchase.

- Only one in twenty people (5%) were happy to wait for their annual valuation statement to find out what charges and commissions they were paying, whilst 4% were content to discover information on charges via their confirmation contract after they had made a purchase decision.

Many people do not realise that they pay commission both on their initial investment, and on an ongoing basis for the lifetime of the investment.

In addition to publishing the true cost of the annual commissions that brands take during the lifetime of the products – allowing investors to compare commissions as a factor in selecting which funds to add to their baskets - rplan.co.uk also displays the all charges in pound terms before a customer chooses to buy a fund.

To date rplan.co.uk has been able to remove the initial charges on 95% of the funds on its site and it will display clear warning signs for funds from the few remaining fund managers that are yet to follow suit.

Andy Creak added:

“We are building a new type of investment proposition based on what people say they want not what an investment brand is prepared to make available. It is outrageous that millions of investors think they are investing for free when in fact they are paying thousands in charges over the life of the product.

"Our latest initiative is another step in our journey to deliver a fair and better alternative to the UK investor. It’s time for the investment industry to walk the talk and deliver an experience for the investor where brands are either upfront about charges and commissions or don’t levy them.”

In addition to delivering on the principle of disclosure and fairness for the investor rplan.co.uk’s research also suggests that transparency is becoming a top issue for investors and that the industry delivering it will correlate with a return of trust.

When rplan.co.uk asked more than 2,000 adults which factors would encourage them to take investment more seriously, 49% said knowing they were dealing with organisations that wouldn’t rip them off with hidden or extra charges was a top consideration. A further 32% of respondents wanted to deal with a firm that didn’t get paid by fund managers to sell their products.
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