The Financial Services Authority has unveiled the first comparative table live on its website today ...
The Financial Services Authority has unveiled the first comparative table live on its website today which are designed to provide consumers with a snapshot of Unit Trust ISAs currently available.
Consumers using the FSA's Unit Trust and OEIC Isa Table will be able to compare more than 100 UK Growth funds from more than 80 alphabetically-listed providers on a like-for-like basis and draw up a shortlist that can then be explored in more detail, either by consulting a financial adviser or contacting the product provider.
The FSA has stressed these tables do not represent FSA "best buys" or "recommendations",
however, products can be filtered using the consumer's own criteria to create a shortlist and a ranking of either tracker or non-tracker, maxi or mini Isas.
Key indicators included in the tables look at:
the effect charges and deductions have on the value of a fund over a 10 or 25-year period;
the number of other funds available in the same Isa;
the impact of charges if the Isa is cancelled in the first three years; and
whether it carries a CATstandard and where it is available - through IFAs, tied advisers or direct from the provider.
A pensions table is expected to be rolled out over the coming weeks - to include including stakeholder pensions, followed by investment bonds, and savings and mortgage endowments.
The table launched today shows that charges on an investment of £100 a month in an ISA over a 10 year period would come out at less than £400 for some of the cheaper funds compared with over £2,500 for the most expensive fund.
Tracker funds, unsurprisingly, tend towards the lower end of charges where as actively managed tend to be more expensive, however, the FSA says this does not mean that the more expensive funds are not worth buying but that they will typically have to outperform the cheapest fund by more than 2% compound over 10 years simply to eliminate the effect of the higher charges.
FSA chairman, Howard Davies, says comparative table should shift the balance of power towards consumers because they provide easy access to "objective and accurate data" on investment choices.
"Comparative table provide access to facts that are normally hard to establish, such as the real impact of charges over the life of their investment," says Davies.
"The Tables don't - and can't - put investment decisions on autopilot. Many consumers will still want and need advice. But they will help to inform and educate the investing public - which is a key objective for the FSA".
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