Almost without exception, wherever you invest, your fee will be calculated as a percentage of your investment. In many cases, you will be charged more than one fee on the same pot of money on this basis.

For example, if your financial advisor has invested you in a unit trust through a fund platform, you will probably be paying three percentage based fees coque samsung j6 licorne one to the advisor, one to the platform, coque samsung galaxy s6 transparent and one to coque samsung galaxy s3 mini stitch the fund coque samsung galaxy ace 4 mini manager.

While some platforms do reduce their fees as the value of your investments grows above a few million, broadly these fees are set regardless of how much money is involved. Whether you have R500 000 or R5 million, you will still be paying 2%.

In rand terms, this is a significant difference. A 2% fee on R500 000 is R10 000. On R5 million, it is R100 000.

Put another way, every time coque samsung galaxy s4 violet you add to your investment, or receive a positive return, your fees goes up. Yet the service you will be receiving is no different.

Regardless of the sum of money you have, you are invested in the same fund, being administered by the same people, and guided by the same advisor.

It is true that R5 million will attract higher transaction costs than R500 000. However, these won be 10 times more. And apart coque iphone xs audi from those costs, there is no higher burden on any of the service providers just because your assets have increased.

The financial services industry may well argue that the reason for this is that there has to be some level of cross subsidisation. It is never economically viable to manage small sums of money. Those with more therefore pay more, in rand terms, so that those with less are still able to receive the same service.

There is some merit to this argument. To enable everyone to have access to investment services, fees have to be kept manageable for those with smaller amounts.

It does, however, beg the question of what it actually costs to manage someone money. And what is that management worth to the ebay coque samsung s6 end investor

This is a particularly problematic issue because few investors actually appreciate, or ever see, the coque iphone xs en verre nominal amount they are paying. Fees are simply deducted from the investment return without the investor ever knowing that they have gone.

If you have R5 million invested and your total annual fee is R100 000, that is significant. You would be paying a large amount of money out every year without ever really feeling the impact, because you don see the sum actually leaving your account.

This is why this week announcement amazon coque samsung galaxy s2 by OUTvest that it is introducing a single, flat fee for all investors from R300 000 should give the rest of the industry something to think about.

The company is asking a question nobody in financial services has dared to pose before.

“The coque samsung galaxy core prime basket idea we had was to ask what does it cost to run an investment service,” says OUTvest MD Grant Locke. “The figure we came to was R4 500 per year, Vat inclusive.”

As an online platform, OUTvest offers robo advice, all the administration, and the underlying portfolios. Its offering includes tax free savings accounts, general investment accounts and retirement annuities (RAs). Any of these can be accessed for that single fixed fee.

How cdiscount coque samsung j3 2016 it works is that OUTvest will charge investors an all inclusive fee of 1.5% on all accounts below R300 000. coque samsung s7 mickey Once an investor reaches that threshold, however, they will be placed on the flat annual fee of R4 500 until their account reaches R2.25 million.

At that point, the effective percentage fee that they will be paying is just 0.2%. Fees on any amount above R2.25 million will then be charged at the 0.2% rate, in order to ensure that transaction costs are covered.

“I don think there is anyone in South Africa who will charge you 20 basis points, all inclusive, on an RA,” says Locke. “In fact, I haven seen a fee globally that matches that.”

The impact this could coque samsung galaxy grand prime paillettes have on what coque aimant iphone xs max investors are actually paying is enormous. As the graph below illustrates, compared to a 3% fee, a fixed fee of R4 500 is one tenth of what an investor with R1.5 million would be paying, coque samsung galaxy s6 harry potter and the ratio continues to fall beyond that.

I agree with the general sentiment towards fees, and it is good to highlight this issue. The main issue here is that over time 3 managers have gained massive market share of the investment industry in SA (AG, Investec and Coronation). With very large coque charge iphone xs AuMs and a fee irrespective of investment size the financial leverage is huge. As AuM grows their ability to provide superior returns to their customers decline. Look at how sad it is to see the once proud AG starting to coque ultra resistante iphone xs compare themselves to the average fund manager instead of a market index to earn performance fees. The main issue here is that above market returns have been poor as market concentration to the large managers have increased, in effect curtailing their own ability to create alpha. Now trying to fix the problem by reducing fees will not address this problem. If fees reduce, the barriers to entry for smaller players to compete with the large managers will increase (small players can be financially viable at low fees). So you will get your lower fees at the expense of alpha as the large asset managers will get even less competition. Advisors need to understand that by not doing their job and by playing it safe with the CIA is going to cause their own demise as coque samsung a5 boulanger they will also increasingly get squeezed on fees, as a result of not doing their jobs properly.

Absolutely. I charge per coque samsung galaxy core prime mickey hour with my clients consent. They agree, in writing, to the rate, the time and sometimes a cap per job/task. If they do not wish to be invoiced by me they may agree, in writing, to the product supplier (pre agreed between us) fees being deducted from their investment. sometimes with a cap). This is due to cash flow, though this can be argued both ways if this is desirable. It is the client decision at all times.

There are many other services an estate planner/financial advisor (not so much of the investment advisor title) should be performing; reviews of Wills, marriage agreements, business partnership agreements, personal risk tolerances, projections and forecasts, considerations of health costs, budgeting, it really is a long list. These services come at a written pre agreed cost between us.

I agree coque samsung j7 pro 2017 with capping fees. In my experience the better off clients with larger investments demand a lot more time from me. They may be more analytical than others but usually coque samsung galaxy a3 minion the larger investments are spread over wider coque samsung galaxy tab s2 8 selections of products as well as markets; such as off shore currencies. A feeder fund has its place but it is not a panacea to all investing selections. Our time spent is not always as simple as might be made out to be.

Fees kills investment. Financial industry is business full of fat cats looking to enrich themselves through fees at your expense. Financial advisers bring nothing to the table. Fund Manager, Financial advisers do what is the best for themselves, not what is best for you. Everyone works for their own pocket.

Morning star works out if a person coque samsung a5 transparente pays 3% total fees a year on a fund over 40 years they will get like 30% less than if they paid total fees of 1% or less a year.

In the United States there are Exchange Traded Funds that only charge 0.04% management fees a year.

Tax free investing directly yourself without a financial adviser in a good Exchange Traded Fund with low management fees is the best for the coque iphone xs golf individual investor…