Know What You Are Paying For

When choosing investment products, it is important to keep in mind that in most cases there are costs attached to every individual layer of the overall product.

- Schalk Louw

I have made several references to the Matryoshka, or Russian nesting doll, in the past because I find it to be such a fitting analogy to describe investment products and the costs attached to them. As its name suggests, it is a set of hollow wooden dolls arranged from small to large, with each larger doll nesting a smaller one.

No different to these dolls, different investment products also fit into each other, and although their packaging may look very attractive, in most cases there are costs attached to each of those individual layers. In other words, the more “dolls”, the less your returns.

This is one of the reasons why you need to be sure that you have chosen the right product when the time comes. A Linked Investment Services Provider (LISP) functions a lot like the Matryoshka nesting dolls. It offers access to a range of investment products and funds kept under one roof.