Reducing costs 

If you are prepared to do some research and feel confident about making your own investment decisions, instead of following the recommendations of an independent financial advisor (IFA) there are various ways to buy Unit Trusts, OEICs and ISAs for your children's future.

In part these routes are differentiated by cost - in particular, the issue of the 'front end charge', typically around 5 per cent of your investment. To put that into perspective: on a £7200 ISA investment, up to £360 could get swallowed up in charges rather than invested.

Caveat

Your money may be at risk. Seek professional advice and invest wisely. Not only is it possible for investments to produce minimal, if any, returns but in many instances your capital outlay may be at risk - always check before investing. Quoted growth rates are usually for illustrative purposes only and are not an indication of predicted growth.

You can buy direct from the fund manager; but it can often be cheaper to buy through a discount broker, who will not only refund his own share of the front end charge but may often have the buying power to negotiate further discounts from the main fund management houses.

However, an increasingly popular route is to use one of the dozen or so fund supermarkets now available online (and indeed being used by a growing number of discount brokers). Fund supermarkets do just what the name suggests - they bring the funds of many different providers together under a single online 'roof'. There, you can browse their performance and investment details before making your selection and paying for your investments, just as you might book an airline ticket online.

Fund supermarkets 

Fidelity's FundsNetwork , the longest-standing and one of the biggest players in the UK;  offers more than 900 funds from 55 providers. The website also provides a great deal of background fund information, plus tools to create and monitor a fund portfolio that accurately meets your investment requirements.

Ample

TDWaterhouse

some, including FundsNetwork , Cofunds and Selestia , are used by financial advisers too.

Advantages to investing via a funds supermarket

• Cost: discounts are mostly in line with those offered by conventional discount brokers, so you will typically pay 0-1.5 per cent in initial fees, rather than 5 per cent. 
• Less paperwork: Instead of receiving statements from every fund manager, you get a single half-yearly breakdown of all your different investments.
• A clearer overview: This has the added advantage that you can see at a glance how your portfolio shapes up, no matter how many different funds and managers are involved.
• Everything's online: Whether you want to add to your portfolio, reorganise it or simply see how your investments are doing, you can do everything at any hour, via the website.
• ISA benefits:  Supermarkets make particular sense for...