Financial Mail - Investors Monthly
The broker scores
By Heidi Dietzsch, Colin Anthony & Tim Sithole
CATERING TO THE FULL SPECTRUM
of investor profiles, Absa has been evolving to include wealth management services, integrating capabilities from the wider bank to provide clients with an holistic offering.
It also has an attractive offshore option: the World Trader Platform, which offers the ability to invest and trade in more than 30,000 shares and ETFs worldwide. Clients can buy ETFs listed on Nasdaq as well as trade long or short exposure in ETFs that track US indices.
This ETF offering is particularly compelling for SA investors, opening a range of investment options not normally open to them.
Absa presents strong research for clients, and portfolio managers offer advice or fully manage the portfolios.
The bank also provides a compelling value offering for young savers, with products designed to suit them accompanied by a strong investment education component. It has partnered with Absa Rewards to give clients who invest and trade 5% back in cash.
AFRIFOCUS CONCENTRATES
both on serving the executive segment and on telephone/advice-based products and, in line with the market trend, combines wealth management services with its stockbroking offerings.
It distributes unit trusts, pension funds and collective investment schemes that are listed on the Allan Gray platform.
The firm has a large number of traditional investor clients, offering full discretionary and nondiscretionary portfolio options. Though this has been a successful strategy, the company is working to attract more young savers and active day traders using low-cost exchange-traded funds and tax-free savings accounts as building blocks.
Many companies have suspended dividends due to Covid-19, which has hit older clients particularly hard. Afrifocus has responded by lowering brokerage fees so clients can diversify portfolios into international markets, and by providing research on preference shares that can assist income investors.
Another initiative is the development of chat rooms where clients can go for advice on such topics as robo investing and cryptocurrencies.
THIS FIRM PUT IN AN IMPROVED
performance this year due to more of its clients completing the online survey. BP Bernstein was established in the early 1950s and has developed extended relationships with clients from one generation to the next.
While it offers online trading, its main focus is still as a traditional advice broker. Most of its clients are in the “traditional investor” and “lump-sum investor” categories, and have been with the firm for more than five years.
It offers discretionary and bespoke portfolios. It is also developing a platform to enable clients to trade offshore equities and currencies. It offers discretionary portfolios.
It received strong ratings from clients for overall quality of service as well as for value for money.
KNOWN FOR INNOVATION,
EasyEquities is benefiting from its focus on young savers, reporting a spike in new account openings since the pandemic hit.
It conducts an annual survey to keep up with what this client segment wants, resulting most recently in plans for a life insurance product designed specifically for the younger client.
The EasyEquities trading app has been instrumental in attracting the younger generation of investors — who now make up 54% of its client base.
Most of the rest of its clients fall into the traditional investor category (36%).
Here it offers tools to assess risk appetite, clarify investment goals and determine how much of a client’s income to invest.
Clients can invest in US stocks and the firm has recently launched EasyEquities Australia, which provides access to all
ETFs listed on the Australian Stock Exchange. As far as we know, no other local stockbroker offers such a facility.
This complements an already strong ETF offering that provides research on local ETFs and guidance on how to use them to build a balanced portfolio.
EasyEquities recently launched EasyProperties, through which clients can invest in property on a fractional basis. This complements its fractional share investing facility, which allows clients to buy fractions of shares.
These and other developments entrench the firm’s strong reputation as an innovator and secure it this year’s Most Improved Broker award.
FNB CATERS FOR ALL TYPES
of investors, offering self-managed passive and active investments and bespoke portfolios. Being part of the FirstRand Group means it can provide clients access to private and business banking, wealth and investment management, trust and fiduciary services and full custodial services. Clients also earn eBucks reward points when trading.
Considered one of the more tech-savvy operators, its online and app facilities present a single view of clients’ banking and investment portfolios, complemented by extensive research. This enables clients to take out quick trading positions when opportunities arise.
The bulk of its clients (42%) are the sophisticated executive archetype, and it offers them self-managed investments with advice, discretionary and bespoke portfolios. But it is strong across the client spectrum. For young savers it has specific products and guidance that aim to provide a sound investment portfolio.
GT247.COM FIRMLY FITS INTO
the discount broker category but still offers a full suite of services, including free research and access to a trading desk team who can provide telephone execution and information on the market.
A sister firm to EasyEquities, the main focus is on the active day trader (70% of client base). It offers trading in local and international equities, indices, CFDs, cryptocurrencies and more than 65 currency pairs.
The firm is committed to investor education and holds weekly webinars in which markets and trends are analysed to develop sound marketing strategies.
IG SA IS THE TOP
CFD Provider of the Year. Part of a global group, it is the largest provider of CFDs in the world — clients can trade in more than 17,000 global markets with by-the-minute insights provided by its global team of analysts.
The firm prides itself on its strong focus on technology development. It has 500 inhouse developers who work to deliver advances in client activity and sentiment indicators; mobile price alerts; price improvement technology; trading signals; improved auto-filling of stop and limit orders; interactive mobile charts; web application programming interfaces for clients to be able to automate their trading; technical analysis alerts; and market screeners.
It caters mainly to two archetypes: active day traders and sophisticated executives, providing extensive research at no cost, supplemented by a strong educational component.
During the pandemic it has offered more webinars and support to clients.
This formula is clearly hitting the spot — in March, with the pandemic gaining ground and global markets nose-diving, IG SA averaged 1-million trades, up from 336,000 in March 2019.
AS A DIVISION OF THE MMI GROUP
and having evolved from the former SP Reid brokerage, Momentum Securities has completed its shift in focus from institutional to retail stockbroking.
The stockbroking business provides access to a range of products through a hands-on, personalised relationship with a portfolio manager.
Managed portfolios are offered through Swiss partner Swissquote. It also offers a multicurrency credit card via Swissquote, which can be used for payments in 12 currencies. This was introduced to meet client demand for geographical diversification of portfolios.
A novel feature is the opportunity to invest in offshore companies through its exchange traded note.
Momentum recently appointed two seasoned structured derivatives and has launched a new platform incorporating local, offshore, derivative and collective investment scheme portfolio views. The firm also offers Sharia-aligned investing.
PSG WEALTH PROVIDES
comprehensive offerings to the full spectrum of investors. Active traders have direct access to the dealing desk, which offers fast communication and market updates via WhatsApp groups and personal interaction with stockbrokers. The firm’s platform is web-based and does not require purposebuilt apps, so it is accessible to clients with any internet-enabled device. Traders can also trade telephonically through the dealing desk at no extra charge.
At the top end, it offers an extensive service to high net worth individuals that includes retirement planning, tax and estate planning, fiduciary services and employee benefit solutions. Its offerings for the other client archetypes are highly competitive.
A high premium is placed on investment research, and the firm boasts a skilled research team. It regularly organises client events, the most recent being its “Think Big” series that includes presentations by speakers such as Jacques Pauw, Guy Leitch, Nick Mallett, Herman Mashaba and Adam Habib.
PSG Wealth keeps its clients satisfied — almost half say its service has improved over the past year while more than 60% rate the overall quality of service as excellent.
THE QUALITY OF THIS FIRM
is reflected in its performance in this survey: it is the
Top Online Broker of the Year and came second in the overall award as well as in the top advice-based broker award. It’s also this year’s top tax-free savings account (TFSA) provider.
Its client base is divided between online traders and high-touch, full-service advisory clients. Online traders have access to a robust research offering. Advisory clients receive assistance on accurate pricing of complex instruments and these instruments are put in the
context of their overall portfolio and risk profile. These clients can make use of advice on risk and financial planning, as well as on estates, wills and tax structuring. Rand Swiss offers traditional offshore and local stockbroking accounts, advice on retirement annuities, TFSAs, bespoke structured products, life wrappers, and local and offshore endowments.
Rand Swiss says its unique selling proposition is that clients have access to a single point of contact and expertise, which clients find particularly valuable in navigating the increased market risks due to Covid-19. Its claim is validated by the high rankings it received from clients across most categories, which secured it second place in the People’s Choice award.
THE TOP ADVICE BROKER
of the Year, Sasfin is nearly 70 years old but started out as a textile trading business before moving into financial services and acquiring Frankel Pollak Securities in 2000.
It focuses solely on advice-based services and as a JSE member it provides discretionary, deal and execution advice, and through its subsidiaries provides financial advice. The firm now also provides fiduciary advice and global estate planning through a new division that considers clients’ generational wealth requirements.
Clients have access to an online portal which provides them with extensive information linked to their holdings and investments. It includes analytical tools, research, watchlists and customised profiles.
Portfolio managers and brokers offer a high-touch execution service, trading on behalf of execution clients when electronic or telephonic instructions are received. The firm believes this is a great value-add for clients since they can leverage the brokers’ market knowledge and execution and risk management skills.
The firm has introduced many new developments over the past year. Its online investing is now enabled and clients can access voluntary, pre-retirement and postretirement managed solutions via a digitally enabled process. A content hub has been launched where research, market commentary, insights, CRS, webinars and news are accessible.
Sasfin has also introduced several new investment products including local and global model portfolios. It now considers environmental, social and governance principles during the investment process and has a focused workstream dedicated to these considerations.
SHARENET CATERS FOR ALL CLIENT
segments, with a strong focus on traditional investors. Execution clients have access to the firm’s in-house trading platform and its data subscription service, which includes domestic and offshore trading ideas, daily market analyses and a quarterly technical analysis report.
Advisory clients automatically receive all the features of Sharenet’s online offering, ad hoc research notes, full access to its trading desk and a dedicated portfolio manager.
Sharenet has developed its own web and mobile trading apps, which include its JSE/market data subscription packages, giving clients access to fundamental company data, unit trust data and trading and investment tools. It has introduced a new trading platform that includes wealth products such as tax-free savings accounts, retirement and living annuities, offshore portfolios, unit trusts and risk products.
Young savers have access to one of the country’s largest and oldest online forums — ShareChat. It includes guidance for firsttime investors as well as peer assistance.
WINNER OF THE OVERALL
top broker award, Standard Online Share Trading (OST), provides the full spectrum of investment options and products and is highly competitive in every client archetype.
Despite its size, Standard OST has particularly impressed us with the continual improvements and additions to its offerings. Last year it made the Viewpoint platform available to all clients at no additional charge. Its Webtrader enables clients to invest in sophisticated offshore financial instruments across various international stock exchanges. Webtrader gives clients access to trade shares and exchange-traded products on 31 international exchanges, as well as more than 160 different forex crosses. For active day traders, the platform offers contracts for difference on more than 5,600 stocks.
Young savers are exposed to free educational courses and material to help them bridge the gap between opening an account and placing their first investment. They can also open an AutoShare Invest account or a tax-free savings account which allows them to invest as little as R250 into a select list of shares or exchange-traded funds.
Senior executives with complex financial needs have access to Standard OST’s Platinum Service Desk, where they can manage various bespoke structures. Standard OST has also partnered with Standard Bank Wealth & Investment to grow its value offering and enable senior executives to access higher levels of wealth services such as financial planners, managed investments, structured lending, and wills and estate services.
STARTING OUT IN 2010 AS
a forex broker in New Zealand, ThinkMarkets relocated to
Australia in 2012 and has expanded rapidly, opening its SA business this year. It makes its debut entry in our survey.
It offers CFD trading only for now but plans to offer equities trading shortly. It is execution-focused and caters particularly well to the active day trader, and provides access to a range of markets including forex, indices, shares, metals and commodities. Clients can trade CFDs in more than 80 JSElisted shares and 1,200 offshore instruments through multiple base currencies.
The focus is on low costs. It does not charge any monthly admin fees, withdrawal or deposit fees. It charges zero commission/brokerage on indices. On SA CFD shares it charges 0.2% with no minimum. This has helped attract a large number of new investors — 30% of its clients who completed the survey identify as young savers.
The firm will take time to entrench itself in the highly competitive local market, but its clients are happy with the start it has made, giving it strong ratings and complimentary comments.
WINNER OF THE PEOPLE’S
Choice award, third overall, third in the advice-based broker category and fourth in the online broker rankings — this young firm put in an excellent performance in this year’s survey.
The firm has worked hard at developing an extensive range of products and services available both online and telephonically. It has also expanded into wealth management — in line with the industry trend of combining stockbroking with wider financial service offerings.
Its client base is spread reasonably evenly across the client archetypes — a reflection that it is succeeding in its goal of being a one-stop shop for investors.
Unum is clearly succeeding at building strong relationships with clients, who gave it excellent ratings across all questions in the online survey.