Brokerage

Pays for:
The transaction costs of a third party (such as a share-broker, real estate agent, bank or investment broker) for buying and selling investments on behalf of the fund.

Also known as:
Dealing costs, transaction costs.

Cost:

Tips

• If you invest in a group product for shares, you should expect to pay the lowest possible brokerage for this type of product.
• There are often brokerage fees when you leave an investment, and these are reflected in the selling price. Make sure you find out the difference between the brokerage prices when buying and selling (the 'spread').
• If there isn't a 'spread' (or if the product says 'there is no brokerage'), the brokerage costs will be charged to the fund as a whole. Brokerage becomes an out of fund cost.
• If you put money in and take it straight out (or switch it straight away), you could lose money because of brokerage on both the money put in and taken out.
• If you are confident about shares you wish to buy and/or sell (especially New Zealand shares), consider using a direct broker account where the transaction cost can be as low as $29 per trade.