An OEIC is very similar to a unit trust. I would disagree that ITs are more successful than UTs. There are good and bad in each sector. The main thing is to get someone with lowish charges (say 1% per year with 5% dealing costs when you buy in) who are easy to deal with and who you are able to trust. It is worth looking at past performance but this should not be your only criteria. In my view it is more important to find an investment strategy that you like rather than to determine that a UT or IT is right.

I would also suggest that you deal direct with either an execution-only broker (who is a member of the London Stock Exchange) for ITs or with the investment company themselves. Advisors do take a cut and, at the end of the day, they do no more than you could do by reading financial magazines when chosing an investment fund. The day to day management of the investment is managed by the investment company however you invest.

Have had expensive experience with Independant Financial Adviser. April 2007 we enquired from one used by friends. Asked for list of investments, they must have thought Xmas had come early, could hear slavering lips. Suggested we transfer EVERYTHING including projected new ISA to their reccomended multi fund. Got a bit chary as we had been offered similar by a fund we already held, free of charge. Under pressure agreed to invest £7000 from which was deducted £245 costs, we were already losing. Then noticed that there was an annual management charge which was levied before they paid us the dividend collected from the well known Managed Trust who had already deducted their own management fees, we only expected a low income, now they had as much as us. After nearly a year we compared the value of the new ISA with others we hold. Starting with a loss we had gone downhill further than those we had not transferred to our advisers. We decided we were better off on our own, cashed in our holding in February, episode cost us a total of £688. How can we pick a winner, certainly, like the old racecourse tipster by giving the name of every runner, an adviser cannot lose. Problem is we old people cannot afford the luxury of keeping them in a manner to which WE are not accustomed.

Laurie mac

Try these websites for further information. Don’t worry too much about past claims unless you are absolutely comparing like with like.

http://www.legalandgeneral.com/investments/

http://www.h-l.co.uk/

http://www.theaic.co.uk/

http://www.investmentuk.org/

http://www.unbiased.co.uk/

Thanks for advice not to invest with canvassing Investment trusts. Problem, the one you reccommend looking at is the canvasser.

Still more questions, on the web site they describe themselves as OEIC, so why are Investment Trusts more successful than, for example, well established Unit Trusts like M&G who are now also OEIC. Too much selling going on, just an ignorant old man looking for good income and a safe haven for a lifetimes savings. Who can give impartial information that I can understand?

Laurie mac

"we are being canvassed" - in my opinion, you should avoid that company. Those that spend lots of money on adverts and canvassing tend to have the highest charges. There are good investment trusts and bad ones, just like unit trusts. The technical differences are worth looking at but alone they do not make one better than the other. One of the largest investment trust companies (and the first) is Foreign and Colonial. You should look at their web site as well as reading up in financial magazines before making any further decisions.

As the market has recently fallen, any investment that you have been holding will have performed poorly in recent months so don't switch just because of that.

20 years ago we invested in a variety of Unit Trusts. When PEPs came we put funds into them, then ISAs. Most of our Unit Trusts became OEICs. Now we are being canvassed by an Investment Trust who claim '£5,000 invested into the average Investment Trust 5 years ago would have grown to £16,120 compared to £10,134 in the average OEIC' What is the difference and how did we go wrong having all our eggs in the OEIC basket? We thought a Unit Trust would invest in various equities, bonds, gilts and anything else to give us Capital Gain and Income, never realised there was an alternative when they became OEICS. Should we consider changing to an Investment Trust?

Laurie Mac