Due diligence needed to choose the right platform

Given the plethora of online trading platforms currently available, investors need to do their due diligence before deciding on a platform and starting to trade, advises Dineo Tsamela, client engagement lead at Standard Bank Online Share Trading.

“Although the sector is well regulated by the Financial Services Conduct Authority (FSCA), the challenge facing investors is that there are a lot of trading scams out there. Investors are pulled in by the promise of high-return in a short period of time. Unfortunately, this leads to them losing their hard-earned money to rogue operators.”

The stringent regulation governing the sector is intended to protect clients and provide checks and balances.

“It’s important clients ensure the platform they are engaging with is an authorised financial services provider,” she says. But that’s far from the only criteria they should be considering.

“Track record is key as is how long the platform has been around for,” says Tsamela, adding that beginner investors also need to ensure the platform provides the right educational resources for their needs.

Other questions to ask include how does the platform supports traders? How easy is it to get started? How credible is the firm? What kind of fees are charged and are they affordable? What kind of services are offered: is a call centre and email hub part of the offering?

“Investors need to be aware that webinars and newsletters are all well and good but that they shouldn’t be mistaken for individual advice. DIY investing can be challenging which is why investors need to be constantly learning and upskilling themselves. And when they’re facing a big risk then it’s important to turn to an advisor for individual advice relevant to their particular situation,” she says.

Tsamela believes data and 4IR technologies will be playing an increasingly more important role in guiding investment decision making and helping investors make better decisions.

“In the investing universe, insights are key to better outcomes,” she insists. “This is particularly relevant when dealing with clients with lower levels of financial literacy and limited disposable income. At Standard Online Share Trading, we are working on taking a holistic approach to client education, which includes understanding the client’s financial situation, where they are on their investing journey and their financial goals. We want to make the education process accessible. Our aim is to partner with clients on their financial journey.”

More than half of Standard Online Share Trading’s clients are active traders. Young savers looking for a simple and lowcost offering can opt for an AutoShare Investment Account or Tax-Free Investment account. Investors can invest as little as R250 in a selection of JSE-listed shares and exchange traded funds (ETFs) at a competitive 0.15% brokerage rate and no monthly account fee. To bridge the gap between opening an account and placing their first investment, free educational resources and content is provided.

Those looking to access offshore markets can utilise the recently launched Shyft Shares, available on the Shyft forex app. Shyft Shares caters for novice and small-scale investors with low fees and a simple user interface, making it easy for investors to tap into global companies.

For individuals with a professional banking account, Standard Online Share Trading matches contributions up to R1,000 in seed capital to make it easier for beginners to enter the market. Standard Stockbroking, the investment advisory arm, is well suited to clients with an active interest in domestic and global financial markets who prefer to have a portfolio manager assist in decision making.

IN THE INVESTING UNIVERSE, INSIGHTS ARE KEY TO BETTER OUTCOMES