I read the “defence of the indefensible” ( Finweek, 12 September) by Sanlam in relation to their new Echo RA… does anyone really understand all that and why does it have to be so complex, especially when it is aimed at the ‘less sophisticated’ investor? What chance does he/she have of ever making sense of what he/she is getting into?
I still don’t think that you can beat a unit trust or an index RA for simplicity, costs, transparency and f lexibility. Perhaps the question that needs to be put to all the actuaries, product developers and marketers behind the Echo RA is how much of their own money each of them has invested into it? And if they have not, why not?
I suspect that very few of them will actually put their own money into this RA and the reasons for this will be exactly the same reasons that the ordinary man in the street should not do it either: It is too complicated It is too expensive and It is too inflexible, and you will only get the bonus if you don’t break the contract over the term…
Far too many terms and conditions for my liking… I won’t use it for myself and I certainly won’t invest any client into a product into which I have not also invested.
The Financial Coach