The fee on investments through 22seven is between 0.90% and 1.66%, depending on the fund. Typical industry fees through an adviser are 2.1% - 3.0%. That’s a big difference, especially over time. There are two main reasons why our funds cost less: one is that they’re sold directly to you (as opposed to through an adviser), and the other is the way they’re managed.
- Adviser vs. Direct
Advisers help you decide where to put your money and they help with the paperwork. Their fee for this is usually around 0.5%. But when you invest through 22seven you come straight to 22seven yourself, and there’s no paperwork – everything happens online. So… no adviser fee.
- Actively managed vs. passively managed funds
Most unit trust funds are actively managed, meaning that the fund manager “actively” makes decisions about what (shares or bonds or other securities) to buy and sell, in which quantities, and when. The unit trusts available through 22seven are index tracker funds, meaning that they literally replicate the index that they track in the market. Here the fund manager has more of a supervisory role as there is limited buying and selling, and no real decision-making (which is why they’re “passively managed”). Passive funds cost less because there’s less managing to be done.