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Prudential reveals DIY investors overlook tax and charges at the expense of performance

(PRWEB UK) 8 March 2013

Almost a third (31 per cent) of DIY investors aren't aware that the way they buy financial products – direct from a provider or from a platform or fund supermarket – can impact the cost of their investment, according to new research from Prudential*.

The findings suggest that many DIY investors, who self-select the majority of their investments, are failing to consider important taxes and charges when making investment decisions. Almost half (44 per cent) admit they don't know which wrapper product would be most appropriate for their circumstances, a further 37 per cent aren’t sure how to avoid tax traps, and a fifth (19 per cent) aren't confident they'll keep under their annual Capital Gains Tax (CGT) threshold.

When questioned about DIY investments that fail to perform as expected, more than a fifth (21 per cent) cite a lack of clarity around product or fund charges as the main reason for the underperformance.

Using the CGT threshold correctly helps investors maximise returns in a tax-efficient way. However, despite most DIY investors (81 per cent) saying they understand CGT, only 28 per cent know the allowance is

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