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Transfer from Old Mutual Wealth platform to Charles Stanley Direct?

Financial Advice | General Helpful? 19

Asked by Stoneman, submitted 06 November 2014.

Open Quote At present I have around £65k in funds on the Old Mutual platform which means I cannot sell funds without going via my IFA whose fees are 0.5% p.a. plus the OM platform fee of 0.5%. I never feel "comfortable" not being able to sell independently.

I have discussed moving everything to Charles Stanley Direct which my IFA is in broad agreement with but wants me to use the Charles Stanley Foundation portfolios at a fee of 0.775% rather than the "ordinary" rate of 0.25%

So, is their any advantage to myself by using a foundation portfolio? I can see it would be less work for my IFA but cannot see any other advantage!
End Quote

Answered by Justin on 15 November 2014

The Charles Stanley Direct Foundation Portfolios are a range of five suggested ‘off the shelf’ fund portfolios and the 0.775% annual charge you mention is the average annual ongoing charge for the underlying funds held in the ‘Growth’ portfolio version. This will be in addition to the 0.25% Charles Stanley Direct platform fee. So, ignoring the adviser, you total annual costs will be an annual platform fee of £162 plus fund charges of £504, i.e. £666 on £65,000.

These portfolios look reasonably basic but pretty sensible overall for a portfolio of your size. The main advantage of using them is that someone else (Charles Stanley Direct) has done the homework for you in selecting funds – which in turn means you could probably ditch your IFA and save 0.50% a year. Unless you have other financial planning requirements then the adviser would have nothing to do if you take the Foundation Portfolio route.

You might also take a look at Cavendish Online, who also offer some suggested portfolios and similar platform charges to Charles Stanley Direct.

Whatever you decide, transferring away from the Old Mutual Wealth Platform is likely to be a good choice as it’s expensive. The first £25,000 invested is charged at 0.50% a year and the next £75,000 at 0.35%. So on £65,000 portfolio you are paying £265 a year in platform charges. Add in fund costs and the IFA fee and you are probably paying around £1,000 or more a year in total.


Please note this answer does not constitute a recommendation or financial advice and should not be relied upon when making specific investment or other financial decisions. You should always undertake your own research into whether a product or service is appropriate for your needs and, if necessary, use a qualified professional adviser.

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Readers' Comments (1) - To post a comment please register or login .


Comment by Vickers at 10:31am on 10 Feb 2016:

You can sell/switch your OMW funds without having to go through your adviser. Just register for online client access or contact their customer careline.