NO-MIN­I­MUM, LOW-COST IN­VEST­ING

CityPress - - Business And Tenders & Auctions -

Sa­trix has been in the mar­ket for over 16 years and has de­vel­oped a strong brand for low-cost pas­sive in­vest­ing, but a year ago it launched a new plat­form, Sa­trixNow (sa­trixnow.co.za), which dra­mat­i­cally re­duces the ad­min­is­tra­tion costs of in­vest­ing. This has al­lowed the com­pany to of­fer in­vest­ments with no min­i­mum in­vest­ment amount.

This means you can start in­vest­ing in the stock mar­ket for as lit­tle as, well nearly zero. For ex­am­ple, if you just have R100 to in­vest or want to pay R20 into the ac­count on an ad hoc ba­sis when you have a bit of ex­tra cash, you can.

In Novem­ber, Sa­trixNow added on a debit or­der fa­cil­ity so you can au­to­mate your pay­ments, again with no min­i­mum in­vest­ment amount, and you can open the ac­count as a tax-free in­vest­ment ac­count.

Be­cause there are no min­i­mums to start an in­vest­ment, they have also in­cluded a voucher sys­tem al­low­ing you to give a Sa­trix in­vest­ment voucher as a gift. The cost of the voucher is 1% plus VAT – so, for ex­am­ple, if you wanted to give a child a R100 Sa­trix voucher, it would cost you R1.14 in fees.

Sa­trixNow is of­fered purely as an on­line of­fer­ing and the sys­tem is man­aged by on­line stock­bro­ker EasyEquities. If you have ac­cess to the in­ter­net or are gen­er­ally an on­line con­vert, the ap­pli­ca­tion process is easy and ef­fi­cient.

Un­for­tu­nately, as I have learnt from ex­pe­ri­ence, when open­ing an ac­count for a child, there is more pa­per­work in­volved and it is not quite so seam­less. This in line with cur­rent Fica laws.

SHOULD YOU SWITCH TO SA­TRIXNOW?

If, like me, you are a long-time client and have funds through the Sa­trix In­vest­ment Plan, you may want to con­sider trans­fer­ring to Sa­trixNow to re­duce costs.

The Sa­trix In­vest­ment Plan has an an­nual plat­form fee start­ing at 0.6% per an­num with a trans­ac­tion charge of 0.08% each time you in­vest.

Sa­trixNow has no an­nual plat­form fee, but charges 0.25% each time you in­vest as well as a 0.2% ad­min­is­tra­tion fee for a debit or­der. So you pay more for the ini­tial trans­ac­tion fee, but less on­go­ing.

As this is a long-term in­vest­ment, the an­nual fee has far more im­pact than the ini­tial fee.

A com­par­i­son of a R1 000 lump sum in­vest­ment shows that the to­tal plat­form fee for Sa­trixNow would be R3.70 in the first year com­pared with R7.81 for the Sa­trix In­vest­ment Plan. In the sec­ond year, no in­vest­ment fee would be ap­pli­ca­ble, so the dif­fer­ence would just be the plat­form fee of R6.76 charged by Sa­trix In­vest­ment Plan.

On larger amounts, say R50 000, you would be sav­ing R300 per year on plat­form fees by year two. Over time, that is a lot of money – so it is def­i­nitely worth the switch. Even for a monthly debit or­der where the higher trans­ac­tion fee would play a big­ger role, within 18 months, the cost ben­e­fit goes in the favour of Sa­trixNow.

In or­der to trans­fer, you need to first open a Sa­trixNow ac­count and then send an in­struc­tion to trans­fer your funds from your ex­ist­ing Sa­trix In­vest­ment Plan.

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