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Anita, 50

Confident and independent, Anita takes charge of her money for the sake of her family. In the past she dabbled with trading shares, but now she’s taking it easy with investments that look after themselves.

My relationship with money: "Security"

"For me, money is a means to an end. I don’t particularly fancy a helicopter or a yacht or anything like that – all I want is to provide security for my family and make sure that my old age is looked after."

Investments on auto-pilot

"I invest in a stocks and shares ISA and it’s only been for the last 7 or 8 years that I’ve been able to use the full allowance. I’ve had a Junior ISA for my son too since he was about 3. He’s 13 now and I’ve paid the full whack for several years now. I’ve got my plan in place.

"I think the best way to do it is multi-asset, multi-class. I’ve been investing in the LifeStrategy funds from Vanguard for the last few years. For my timespan – I have about 12 or 13 years until I’ll retire – I can just leave it there and the market will ride it out.

"At the minute I’m on LifeStrategy 80% equity. When I hit my mid-50s my plan is to go down to 60% or 40% equity. If I’m a long way away from retirement then it’ll ride it out. But when I only have 5 years to go then I obviously want to take less risk, because the markets at the moment are very volatile and might take a long time to even out."

Figuring out the platform fees

"I used to use a financial adviser for my investments, about ten years ago, and the management fee was about £500 a year. So I’ve stopped that and put the money in Vanguard again. It has an interactive platform where you can look at it yourself and manage it yourself with an online accountPlus the management fees are much more manageable. Much better than the 5% I used to pay.

"Before, I had no idea what the fees were. Then the new rules came out where they have to be more transparent. And they are now, but it used to be eating into my returns. So I think the management fee is a key thing really."

Musings on kids and money

"When choosing my son’s account I look for someone with a good track record and decent management fees. Big names usually – I don’t do any little ones. And I know past performance shouldn’t be an indicator but it has worked for me. My son’s savings account is doing quite well.

"I’ve tried to do for him what my father did with me. He said to all of his girls that when you grow up don’t rely on a man. The men will go but the only person who’s going to look after you is you, so be financially independent. It’s not always easy and when we used to get pocket money I would keep a little account book so I knew where I was spending things. I’ve tried to get my son to do it but he won’t have it. The problem with kids these days is this feeling of entitlement, so I want to try and strip that and make him know where the money is coming from."

My biggest money question...

"I realised a couple of years ago that the actively-managed fund fee is eating into my investment returns. How can I make sure I’m keeping costs down?"

Answer by Lesley James, Simplified Money

You ask a very potent question. Because what you pay for your investment can have a very significant impact on what you could achieve. Fund charges differ by only small percentage points but – as you have noted – when they are too high, they can really begin to eat away at the amount you’ll get back.

There is good news, though. Disclosure is improving. New rules and protocols are making it easier to find out the true costs. Some providers are stalling but in the main, you should now be able to compare the fees of most mainstream providers pretty easily.

What charge is what

Annual Management Charge (AMC)

This is the amount charged by the fund’s manager. It typically covers the fund’s internal costs and profit margin. However, it typically ignores some third party fees - such as auditing, dealing, admin and custody fees. It is good to know what the provider is charging, but this is not the full story.

Total Expense Ratio (TER) or Ongoing Fund Charge (OCF)

This includes the above AMC but also includes operational running costs such as those above mentions administrative fees, dealing costs, custody, dealing and other operational charges. This is still not perfect, but it is a far better indication of a fund’s true costs than the AMC.

Transaction costs

These are the charges typically incurred in trading underlying investments. High turnover funds – those buying and selling regularly – will have higher costs than those that buy and hold for long periods. It is difficult to predict future but historic fees could give you an indication of activity in the fund.

Entry and exit fees

Some funds may charge something for buying and/or selling. Be sure to check that apparently low cost fund you have found doesn’t carry a nasty sting in the tail.

Where to start

Among the lowest cost funds available are the ‘passive’ index trackers, so called because they don’t make any decisions about where to invest. Instead, they use various tools and computer models to replicate indices, so that your investment performs directly in line.

The only difference between those indices and your investment performance will be the fee. But passive funds don’t require much resource. Which means some managers now offer multi-asset, risk managed, passive funds for less than 0.5% a year.

If you’re the type of person looking for a combination of minimum complication, minimum fee and real growth prospects, these could offer you one of the best places to start.