Nancy asks:

My husband and I have investments currently managed by Cofunds and Skandia. We are concerned about the high management charges and are considering moving the funds to an online investment company, such as Cavendish Online, which charges much less.   Are these online companies safe and would you recommend the move? Or, how else can we reduce the annual management charge? We were both made redundant last summer, (I used to work for an IFA, husband was an accountant) so need to make sure our investments are not eroded by charges, as they are not performing well because of the stock market. Thank you.

Before you consider funds and I would ask if you need to and are happy to continue to accept the investment risk involved in this type of investment? If you are concerned about the erosion of your capital, stockmarket based investments may no longer be appropriate for you. Given the change in both your circumstances it may be a good time to reassess your goals and aims and look again at what your investments need to do for you.

If you do wish to continue with these types of investments one way of reducing charges could be to consider tracker funds. These funds track a particular index (such as the FTSE 100) rather than being actively managed, so the charges are lower. However, you would have to make sure that a tracker fund would fit in with your risk profile and that you were not taking on more risk than you felt comfortable with.

If you opt to continue with Cofunds and Skandia bear in mind that some form of renewal commission is likely to continue to be paid to the original adviser who set up the investments for you.

In relation to Cavendish I am unable to provide a specific recommendation, however, I can confirm they are FSA registered. I see nothing wrong with using such a proposition although you should always check the fine print regarding their charges, how commissions are rebated etc.

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