What do your Investments Cost?

Ruvan J Grobler • March 18, 2024

Investment fees should not be difficult to understand and must at all times be transparent. Many years ago, this was not the case but in recent years the industry has standardized the terms and set out clear limits.

Annual fees set out as an EAC table (Effective Annual Cost) is relatively easy to access even for the investor by logging into their online portal. These fees will always be set out in the initial proposal and quotation before any investment is done and is a good reference point for reporting.


The total fees are shown as a percentage of the capital invested on an annual basis and includes VAT.



Here is an example of how that would look:

  •  Investment Management: The impact of the investment management charge is based on the weighted average annual fee of the underlying assets
  • Advice: The impact of the advice charge is based on the annual fee as shown in the table
  • Administration: The impact of the administration charge is based on the annual administration fee charged by the platform, which is calculated on a sliding scale
  • Other: The impact of other charges is based on fees paid in respect of model portfolios or other discretionary managers


- How are these fees paid?

The fees will automatically be paid monthly from the capital to the parties involved by the investment platform. Some investors choose to pay the advice fee direct to the advisor firm. The advice fee will in this instance not be included in the table above.



- Do fees have an effect on growth?

Fees are an expense to the invested capital and growth should be reported on after fees. Lower fees mean higher effective growth rates.

Some advisors ask higher annual advice fees than others, but these fees are justified in the amount of hours and knowledge that goes into the planning and management of an investor’s portfolio.


A “value add” may include tax- and estate planning using the underlying structures of an investor’s portfolio. Providing feedback on financial goal setting based on investment horizons in annual review meetings may also be a way to justify advice fees.


Ruvan J Grobler RFP™ (PGDip Financial Planning)



Photo by StellrWeb on Unsplash

Start Investing Today

Should you withdraw your Pension and pay off your home?

By Francois Le Clus • May 28, 2025
Should you withdraw your Pension and pay off your home? It's perfectly normal to ask whether you should use your pension to pay off your home when leaving an employer. This decision involves weighing the tax on the withdrawal, the interest saved on your bond, the future growth of your pension fund, and the contributions needed to catch up. Example: Anne is 40 years old with a pension fund worth R3,500,000. She bought a home 10 years ago for R3,000,000 and bonded it over 20 years at an 11% interest rate, with monthly repayments of R30,965. After 10 years, her outstanding bond is R2,258,225. If she withdraws her pension, she’ll receive R2,408,300 after tax—enough to settle the bond and have some cash left over. By paying off the bond early: She saves R1,467,919 in interest. She frees up R30,965 in monthly cash flow. However, if she keeps the money invested, her pension could grow to R37,921,470 by age 65 (assuming 10% annual growth). To match this value after using her pension to pay off the bond, she’d need to invest R28,580 per month for the next 25 years. That’s R2,385 less than her current bond repayment, so she does save monthly—but only for the next 10 years. After that, she’s committed to investing R28,580/month for 25 years to break even.  Not everyone’s calculation is the same and there are endless amounts of permutations to this calculation, but it’s important to note that you need to consider all of these factors when making these crucial decisions.

GEWOONTES VIR GELUKKIGE AFTREDE

By Riaan Botha • May 28, 2025
Ons ontleed watter gewoontes meewerk om ’n gelukkige aftrede te verseker. Hierdie maand bespreek ons hoe om gesond te lewe tydens aftrede. Mediese kostes verhoog hoe ouer ons word. Die koste van ’n mediese fonds verhoog jaarliks met meer as die inflasiekoers en mediese uitgawes sal in die toekoms ’n al groter persentasie van ons persoonlike uitgawes vereis. Dit is daarom belangrik om so gesond as moontlik te leef. Hier is verskillende stappe wat gevolg kan word om gesond oud te word: Eet gesond. Moenie oorgewig wees nie. Word sterker deur oefeninge te doen wat jou spiermassa behou. Doen jaarliks mediese ondersoeke om te bepaal hoe gesond jy is. Beskerm jou gewrigte en beenstruktuur deur krag- en rek-oefeninge te doen. Verminder rook en alkohol-inname om jou kanse van kanker en ander siektes te beperk. Indien jy ’n familie-geskiedenis het van siektes soos kanker en hart-toestande. moet jy vir gereelde mediese toetse gaan om vroegtydig te bepaal of jy nie die siektes onder lede het nie. Verbeter jou liggaamsbalans deur oefeninge te doen soos om op een been te staan terwyl jy jou tande borsel. Hierdeur verseker jy dat jy nie gereeld jou liggaamsbalans verloor en val nie. Studies het bewys dat dit help om jou fisieke en geestelike gesondheid te behou deur sewe tot agt ure per nag te slaap. Hou jou brein-funksie of kognitiewe vermoë in ’n goeie toestand deur brein-oefeninge te doen, soos om nuwe stokperdjies te beoefen of memoriseringsoefeninge te doen. Volg ’n aktiewe sosiale lewe. Studies het getoon dat mense met ’n aktiewe sosiale lewe minder geheue-probleme ontwikkel. Hulle het ’n verminderde kans om eensaam te voel en depressief te word (Health Connection, Cooper, University Health Care, 9 September 2024).