The idea of a fund supermarket arrived in the UK at the end of 1999. There are now a number of these services, with different names and services. Originally the term supermarket was given to these businesses because of the way in which they operate. Today, the term platform or wrap is often used as well. They offer a very wide choice by allowing investors to invest into funds, through unit trusts, investment trusts or OEICSs, promoted by many different investment management groups. Some platforms are now offering access to certain pension products as well as onshore and offshore investment bonds.

There are a range of fund supermarkets and platforms some of which are only available through the Internet. There are differences between them in terms of charges, the number of investment management groups on offer, services and functionality.

Fund supermarkets, or platforms, were developed to offer a more convenient way for people to invest into collective investment funds, which in the UK mainly consists of unit trusts, investment trusts or open ended investment companies (OEICs).

Most of the fund supermarkets allow you to hold these investment funds with tax efficient wrappers such as individual savings accounts (ISAs).

By investing through a fund supermarket you can often purchase your investments on–line and once the plan is set up you can receive consolidated statements that show the value of your total investment, even if it is spread across a number of different investment management groups. An important feature is the ability to mix funds from several different investment management groups within one product such as your ISA plan.

Platform charges vary considerably between the different providers. Some have flat–fee charges, some express their charge as a percentage of the investments you hold with them. Some have a monthly or annual charge, irrespective of the amount you hold. Some platforms apply different charges depending on whether you have existing funds with them.

Some platforms, typically larger more established institutions have negotiated substantially discounted charges with some of the investment companies. This means that you might be able to invest into a particular fund more cheaply than going direct to that investment company.

Great care should be taken to ensure that the platform is chosen carefully, as the effect of charges can be considerable. Some platforms set their charges to be very competitive for certain investment types, but they may be less competitive for others.

It is quite unlikely therefore that a single platform is suitable for everybody. If you have any doubts seek professional advice before taking any action.

Each of the various fund supermarkets will have their own individual arrangements with investment management companies. It is normal for a fund supermarket to offer a wide range of investment funds from various investment management companies. This means that although some management companies will appear across a number of different supermarkets or platforms it is unlikely that all will offer exactly the same investment choices.

Normally they greatly reduce the number of application forms, contract notes and valuation statements you will need to retain. Fund supermarkets allow you to consolidate fund investments into just one plan therefore you only need to complete one application form, instead of having to submit individual forms to each separate investment management company you wish to invest with.

On–going paperwork is also reduced. You will receive one consolidated investment statement that provides details and valuations of all your investment holdings. Once again this saves you from having to retain many different statements from the various investment management companies in respect of the investment funds you hold.

The taxation of individuals varies in accordance with their personal circumstances and therefore is beyond the scope of this guide. If you wish to find out more about the taxation position of any investment you are considering, seek advice from a tax specialist.