How commission works
Most funds carry two charges - an initial charge, when you first buy into a fund, and an ongoing charge. Both are automatically deducted from your investments by the fund manager. Find out more in the cost of investing
Both the initial and ongoing charges include a commission paid by the fund manager to the intermediary or broker.
rplan rebates at least 50% of the ongoing commission it receives back to you, and has negotiated to remove the initial charge completely on most funds.
When you invest in a fund an initial charge is normally made by the fund manager. This charge is deducted from your investment and can be up to 5.5%.
The initial charge is made up of commission to the adviser or broker through whom you bought the funds (this is paid directly to the adviser or broker by the fund manager), and a fund manager charge for setting the investment up.
rplan has negotiated to remove the initial charge completely on 95% of the 1,500+ funds available on the service, and waives any initial commission on the remaining 5%. As such, we don't receive any initial commission at all.
An ongoing charge of around 1.5% per year is made by the fund manager on your investment. The ongoing charge is made up of commission to the adviser or broker through whom you bought the funds (and again is paid directly to the adviser or broker by the fund manager), as well as a fund manager charge for the management of the investment and a platform charge for the administration of the investment.
The ongoing (also called renewal or trail) commission is paid by the fund manager to the adviser or broker, but is deducted directly from your investments as a part of the ongoing charge.
rplan rebates 50% of any ongoing commission it receives straight back to you, and caps that commission to £5 per month. Find out more in how we charge