06.Checklist for investing
: how much have you got to invest? Entry amounts vary, but $50,000–$100,000 is recommended as the minimum starting amount to effectively invest in some portfolio platforms. Some platforms penalise small amounts through transaction and annual fees, while others have lower minimums and are suitable for investors with smaller amounts. Features
: what choice of funds do you need? Will a cheaper managed fund suffice, or do you need the service and choice a portfolio platform provides? Do you want to trade shares or move money between funds? Do you need extra features such as insurance or margin loans? Costs
: how will you pay for advice — commission- or fee-based? Have you compared platform, fund manager and adviser costs to find the best value for your needs? Service
: how quickly are reports generated and transactions, such as switches between managed funds, carried out? Some platforms can execute your transaction orders on the same day; with others it can take weeks. Tax
: What tax will you pay? Have you confidence in the company running the platform? Some commentators predict the market will consolidate in the next few years, meaning there’ll be fewer wrap and master trust providers and some may be wound up or taken over. If this happens, you may need to switch to another platform and this could trigger a big Capital Gains Tax liability. This depends on the type of platform. Advice
: consider getting professional tax and financial advice for this often complicated area. It’s recommended that you do regular reviews (annually) to make sure your investment strategy remains aligned with your needs.