Supposed "Investment Fees"

SmartKit

SmartKit

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We recently received a sum of money back that had been invested on our behalf, it's main purpose was to be held in trust not for actual financial gain.

During this period the sum earned interest of about 3%, we were returned the sum without interest and then made an enquiry. We were told by this supposedly reputable organisation that there investment fees were covered by this interest.

At no point did they disclose such fees, nor did we sign anything to that effect.

The interest yielded was minor, but is it correct or even legal for this organisation not to provide such information up front?
 
phaktza said:
We recently received a sum of money back that had been invested on our behalf, it's main purpose was to be held in trust not for actual financial gain.

During this period the sum earned interest of about 3%, we were returned the sum without interest and then made an enquiry. We were told by this supposedly reputable organisation that there investment fees were covered by this interest.

At no point did they disclose such fees, nor did we sign anything to that effect.

The interest yielded was minor, but is it correct or even legal for this organisation not to provide such information up front?
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It's up to whoever created the trust to negotiate all that. I recently got screwed (being a beneficiary of a trust) in a similar manner but I will be taking the trustees to court (over a legal dispute, not the $$) so I'm still in the process of finishing things off.

In short, the Property Trust Control Act of 1988 says that the trustees are allowed to charge a reasonable fee as remuneration and you need to take it up with the Master of the Court if you feel they charged too much.

If you only got charged the 3% then you got off pretty light.
 
The response upon query, please note we have no engagement letter with the company, merely an instruction to hold the money until such time as it is released. They have also refused to divulge if indeed they formed a trust or merely stuck it in a savings account as this would cost them too much time and effort!

Dear xxx

We will be not breaking this down on an itemised based and were we to spend any more time on this and charge you per item of correspondence as we are entitled to do, this fee would be far in excess of what you have been charged.

Our standard FICA fee alone is R200 plus Vat, our fee for drafting your Authority to invest would be a further R150 plus Vat and so on for each and every correspondence item, let alone the instruction to our bank to open and close account the account, receipting your payment and refunding you accordingly. Should you be of the opinion that this service is done free of charge you are mistaken, hence the authority to invest which you signed which authorises the payment of attorney and own client fees.

In fact on a whole, we as a firm have lost money on this development given all the correspondence we have had to generate. so we will not be spending further resources thereon.

Our file is closed.

Kind regards,
xxx
Nochumsohn & Teper
145 Oxford Road, Rosebank, 2196
PO Box 1106, Houghton, 2041
Docex 90, Johannesburg
Tel: xxx
Fax: xxx
E-mail: xxx
www.nandt.co.za

NOCHUMSOHN AND TEPER ATTORNEYS ARE A LEVEL 1 B-BBEE CONTRIBUTOR.
EMPOWERDEX RATING: AAA+

Attorneys, Notaries and Conveyancers
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Guess you just can't trust attorneys. I'm still not sure what our "investment fee" even bought us.
 
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froot said:
It's up to whoever created the trust to negotiate all that. I recently got screwed (being a beneficiary of a trust) in a similar manner but I will be taking the trustees to court (over a legal dispute, not the $$) so I'm still in the process of finishing things off.

In short, the Property Trust Control Act of 1988 says that the trustees are allowed to charge a reasonable fee as remuneration and you need to take it up with the Master of the Court if you feel they charged too much.

If you only got charged the 3% then you got off pretty light.
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Personally, I don't feel the trust was ever set up, they put it in an FNB savings account and forgot about it. In which case FICA, not the Property Trust Control Act of 1988 applies.

Good luck to you! I'm just glad it wasn't a bigger amount.

Now we know not to nominate these attorneys in any of our dealings. Great way to promote their business, I must admit. I've actually met the guy and he's a bit of a creep, so to be expected.
 
They charge for FICA'ing??? To be honest, never heard of that!
 
IzZzy said:
They charge for FICA'ing??? To be honest, never heard of that!
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Well they refuse point blank to tell us what they're charging for, this was just a rant, but I assume it's part of the costs.
 
...sheesh ... trust lawyers to expect you to pay them to tell you what they are expecting you to pay for.
 
Yeah, report them, this sounds a little too much like blackmail to me

We will be not breaking this down on an itemised based and were we to spend any more time on this and charge you per item of correspondence as we are entitled to do, this fee would be far in excess of what you have been charged.
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Tell them that as a client, you have a right to a statement and an abatement of account.
 
Approach the financial service board, maybe they can get a response
 
I hate mails like that ...

I had a thing with ABSA as well where a trust was setup held for a period of 7 years.

At the end there were huge fees involved and when I queried, I was simply told 'Those figures were agreed to at the start of the contract. Sorry' ... no good will or anything. That was AIMS (ABSA) btw ... caution
 
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