Fundsmith Equity Fund
692.28p T Class Acc, 23 Jul 24

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An ISA (Individual Savings Account) is a savings account available to UK residents on which the return is tax-free and which need not be declared on the investor’s tax return. All income (dividends and interest) and all capital gains within the account are free of tax. For the current year, 6 April 2024 to 5 April 2025 the overall investment limit is £20,000 (excluding the British ISA which has a separate £5,000 limit).

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ISA Buyers Beware - Largest UK Asset Managers Still Charge Initial Fees

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Terry Smith, Chief Executive of Fundsmith warns that last minute ISA investors must do their homework if they are not to incur initial fees.  Whilst Fundsmith charges no initial fee, the majority of the largest asset managers still charge up to a 5% initial fee if buying an ISA direct.  This means that investors’ new ISA investments will start with the disadvantage that on average on day one they could have as little as 95p out of every £1 they invested.


“At Fundsmith, we embrace a direct relationship with our investors”, says Terry Smith, Chief Executive.  “At our first Shareholder Meeting held on 5th March at The Royal Institute of British Architects, over 300 of our investors attended for an update on the fund and Q&A session.


“We intend to make our Shareholder Meeting an annual event, enabling our investors to question us face to face.  This is a policy that is due to get promoted in an upcoming paper on reform of the UK mutual fund Industry to be published by the highly respected Cambridge political think-tank, the Wilberforce Society. The policy is intended to improve accountability amongst money managers and one which Fundsmith wholeheartedly endorses.


“However, investors need to be careful that by going direct to other fund managers they are not incurring the penalty of upfront charges. There are no upfront charges at Fundsmith.”