A novice-friendly in­vest­ing plat­form

Tsamela looks at cost-ef­fec­tive trad­ing op­tions for be­gin­ners

CityPress - - Busi­ness -

One of the most dif­fi­cult things about in­vest­ing, when one fi­nally de­cides to ven­ture into the world of shares and mar­ket move­ments, is find­ing a plat­form that is be­gin­ner-friendly.

Often, ea­ger in­vestors give up when they are faced with a trad­ing or in­vest­ing plat­form that is dif­fi­cult to nav­i­gate and isn’t in­tu­itive – you feel like you need an in­struc­tion man­ual just to buy a hand­ful of shares.

EasyEquities was my light at the end of the tun­nel and when I first stum­bled upon the plat­form (thank you, Twit­ter), and sign­ing up and find­ing my way was pretty sim­ple. Pro­cess­ing the pa­per­work was a breeze, the fee struc­ture was easy to un­der­stand and the web­site’s lay­out is ac­ces­si­ble.

The sim­plic­ity of the prod­uct of­fer­ing – eq­uity trad­ing and tax-free ex­change-traded funds (ETFs) – lim­its the num­ber of prod­ucts avail­able to in­vestors, which is ben­e­fi­cial for a new­bie who wants to in­vest in their favourite brand’s shares with­out get­ting lost in deep tech­ni­cal strate­gies.

Begin­ner in­vestors also have the op­tion of open­ing a demo ac­count and play­ing with fake money be­fore com­mit­ting to an in­vest­ment strat­egy.

The EasyEquities plat­form is one of the cheap­est plat­forms for in­vestors. There is a 0.25% min­i­mum bro­ker­age com­mis­sion fee and no monthly fees ap­ply. You can in­vest as lit­tle as R5, but there are still ap­pli­ca­ble tax pay­ments and trans­ac­tion costs.

One thing that be­gin­ner in­vestors will ap­pre­ci­ate is the abil­ity to own frac­tional shares if you are un­able to af­ford the whole share. For in­stance, if you want to buy Naspers shares but don’t have R2 000 at your dis­posal, you can buy a frac­tion of the share. EasyEquities then is­sues you with what is called a con­tract for dif­fer­ence, which in­cludes the ben­e­fits of share own­er­ship even though you do not own the un­der­ly­ing share com­pletely. This a frac­tional share right.

When it comes to tax-free sav­ing, EasyEquities of­fers 47 dif­fer­ent tax-free ETFs. The fee struc­ture is still 0.25% bro­ker­age com­mis­sion fee and in­vestors are ex­empt from se­cu­ri­ties trans­fer tax, cap­i­tal gains tax, div­i­dend with­hold­ing tax on div­i­dend earned and tax on in­ter­est earned.

As with all tax-free sav­ings prod­ucts, the an­nual and life­time con­tri­bu­tion re­stric­tions still ap­ply, so you have to keep a close eye on your con­tri­bu­tions.

For a novice in­vestor who is look­ing for a cheap, easy-to-nav­i­gate and ef­fi­cient in­vest­ing plat­form, EasyEquities comes highly rec­om­mended. Par­ents can also open trad­ing ac­counts for their chil­dren.

Other on­line trad­ing plat­forms

When com­pared with other trad­ing plat­forms such as PSG Stock­broking or Stan­dard Bank On­line Share Trad­ing, EasyEquities falls short in that it doesn’t of­fer other types of prod­ucts such as fu­tures, off­shore shares (of­fered by PSG) and war­rants.

On cost, how­ever, EasyEquities is a win­ner. Stock­broking and on­line trad­ing plat­forms specif­i­cally geared for traders usu­ally carry a monthly fee, or have a min­i­mum trad­ing fee.

For in­stance, Stan­dard Bank’s monthly “ac­count main­te­nance” cost is R70. FNB’s Share In­vestor plat­form comes at a lower rate of R49 a month, but op­tions are lim­ited to JSE shares and Kruger­rands.

Stan­dard Bank also of­fers phone trad­ing (at an ex­tra cost) and cus­tomers have to be aware of other costs such as set­tle­ment fees, share and port­fo­lio trans­fers, and with­drawal fees.

PSG’s plat­form, like Stan­dard Bank and GT247.com, of­fers a di­verse prod­uct range. In­vestors can choose to in­vest in lo­cal and off­shore shares, sin­gle stock and cur­rency fu­tures, and con­tracts for dif­fer­ence, among other op­tions. It’s im­por­tant to note that these plat­forms are geared to­wards the more ex­pe­ri­enced in­vestor who has an in-depth un­der­stand­ing of tech­ni­cal anal­y­sis and can use dif­fer­ent trad­ing strate­gies to max­imise prof­its.

San­lam’s iTrade plat­form is also very pop­u­lar with traders, and it is com­pet­i­tively priced. iTrade clients pay a monthly fee of R50, and the first month of trad­ing is free. If the bro­ker­age fee ex­ceeds R300, the monthly fee is waived. Its bro­ker­age fee is struc­tured ac­cord­ing to the value traded and is im­por­tant to con­sider when com­par­ing costs.

If you feel that you are at this level, you can check out these six lo­cal trad­ing plat­forms:

1. Stan­dard Bank On­line Share Trad­ing: se­cu­ri­ties.stan­dard­bank.co.za

2. PSG Stock­broking: psg.co.za/wealth/stock­broking 3. San­lam iTrade: san­lami­trade.co.za 4. Absa Stock­bro­kers: ab­sa­s­tock­bro­kers.co.za 5. FNB Share In­vestor: fnb.co.za/share-in­vest­ing/ share-in­vestor

6. GT247.com: gt247.com

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