Chartered Institute of Stockbrokers (CISI) Professional Practice Exam

How are unit trusts typically purchased?

1. Through a financial advisor

2. From the stock exchange

3. Directly from the manager

4. Via a bank branch

The correct answer is: Directly from the manager

Unit trusts are typically purchased directly from the fund manager. This approach allows investors to buy units in the trust without intermediaries, which can often reduce fees associated with the purchase. By going directly through the manager, investors can receive detailed information about the units they are acquiring, including the investment strategy and performance history. This direct transaction can also provide clarity regarding fund management and any associated costs, enabling investors to make informed decisions about their investments. Other channels, such as financial advisors, the stock exchange, or bank branches, may facilitate investments in unit trusts, but the primary method for purchasing them remains directly from the manager. This gives investors direct access to the fund and establishes a clearer line of communication regarding their investment.