This is the time of year when many of us are considering our investment options, whether due to a financial spring clean, the upcoming end of the tax year or perhaps the receipt of a bonus.

For anyone looking to put money into the stock market - either as a lump sum or as a monthly pension or ISA contribution - a prime consideration is the investment time frame and the amount of market risk we are willing to live with during the course of the investment.

However, there is another crucial factor that we must all take into account - the extraordinary attrition that high fees have on the value of our investments.

In the past, we may have been less aware of the level of charges because interest rates were so much higher. If we were paying total annual fees of 2% per annum, while this is high, we may not have focused on it if market rates were closer to 10%. Now, deposit rates and the returns on UK government bonds (the risk-free rate) are below 1%, so there is a greater need than ever for us all to make sure that we really understand the all-in charges we are paying and the impact that can have on our savings.

Recent campaigns in the press and investigations by City regulator the Financial Conduct Authority (FCA) have highlighted the fact that this is not always that simple. Last November, the FCA published a damning report that criticised asset managers for their lack of fee transparency and also focused on the need for the asset management industry to make it easier for private investors to move their portfolios to other providers without suffering high exit charges or other one-off costs.

Existing holdings

While receiving a windfall such as a bonus payment or an inheritance is bound to prompt individuals to consider their investment options, the same attention should be paid to existing holdings such as pension pots and ISA portfolios.

In fact, in total, existing investments may well be far higher than a windfall, so the potential benefit of moving to a manager with much lower costs is even more significant.

Based on the many portfolios we have reviewed, we can see that our total charges are around a third of the all-in cost that our clients have been paying elsewhere. As the above chart shows, this fee differential can have a massive impact on an investor’s savings.

Beyond fees

At Netwealth, together with much lower fees, our service keeps the best of a traditional discretionary asset manager - such as having a skilled investment team and access to financial advisers if desired. Clients can also take advantage of a series of other benefits designed to make the service accessible and user-friendly, including customising portfolios based on your own requirements and goals. We have clients who are using the regular payments service for school fees or other expenses, while other clients are moving their ISA and SIPP portfolios with a view to growing these tax efficient pots over their chosen timeframes. In addition, over 50% of our clients are in a Netwealth Network, enjoying the economies of scale that this drives.

While it can be tempting to put off making a decision on your finances, there is now an alternative to the traditional services which addresses the key aspects required for your long term financial health.

Remember, the value of your investments may go down as well as up and your capital is at risk.

Chart data source: Netwealth and Numis Securities. Based on: the forward-looking expected gross return of Netwealth's Risk Level 4 portfolio of 4.4%; a total expense ratio (TER) for the Netwealth portfolio of 0.6% (made up of Netwealth's fee of 0.35% and underlying fund fees of 0.25%); and a TER for the traditional wealth manager taken as the average TER of wealth managers listed in research by Numis and Citywire, as published by Citywire Wealth Manager in February 2015 (http://citywire.co.uk/wealth-manager/news/discretionary-fees-laid-bare-let-the-calculations-begin/a799209).