Adding to RA - which option is best

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lkpat

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I have an Old Mutual RA that I've been paying into for some time and want to consider increasing my contributions. I've just had a chat with my (new) broker who is suggesting a move to Discovery where I move the entire fund across. They're talking about a 'booster' that's basically a lump sum they inject as a pot sweetner to get me to move the fund over. There will be fees in moving the fund, but the booster is designed to cover them plus a bit extra.

My main question is - why should I move my existing RA from Omu instead of just opening a new one (I have 10-15 years to retirement) - is there a benefit?
Is it not better to simply increase my contributions to my existing RA? Or is there a benefit from having an additional RA (starting from scratch)?

Perhaps I should go with a more aggressive portfolio and start from scratch, or should I just invest in something else for the next 10 years and pay tax on that money up front?

What would you do?
 
Last edited:
lkpat said:
I have an Old Mutual RA that I've been paying into for some time and want to consider increasing my contributions. I've just had a chat with my (new) broker who is suggesting a move to Discovery where I move the entire fund across. They're talking about a 'booster' that's basically a lump sum they inject as a pot sweetner to get me to move the fund over. There will be fees in moving the fund, but the booster is designed to cover them plus a bit extra.

My main question is - why should I move my existing RA from Omu instead of just opening a new one (I have 10-15 years to retirement) - is there a benefit?
Is it not better to simply increase my contributions to my existing RA? Or is there a benefit from having an additional RA (starting from scratch)?

Perhaps I should go with a more aggressive portfolio and start from scratch, or should I just invest in something else for the next 10 years and pay tax on that money up front?

What would you do?
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Ask the broker... he is the most qualified for this.

But his advice is binding and he will be helpd accountable for it.

Tell him that is sees what he says.
 
BadBoyGP said:
Ask the broker... he is the most qualified for this.

But his advice is binding and he will be helpd accountable for it.

Tell him that is sees what he says.
Click to expand...
The broker also stands to gain from their advice.
 
Speedster said:
First establish whether you have an independent broker or a discovery salesperson.
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He would need to disclose that.

The fais act specifically excludes him from recommending one underwriter solely based on his benefits.

Bring this up to him, if he is he will change his mind immediately
 
You should move it because their fees are outrageous if nothing else.

Go have a real look on their online portal how most of your money disappears before it’s even invested, then also disappeared afterwards in management fees, not the performance bullshit the broker shows you which only looks at money inside the investment.

Drop the broker and go to anyone Sygnia or 10X that allows you to go direct and have little to no fees for admin and management bullshit.
 
BadBoyGP said:
Ask the broker... he is the most qualified for this.

But his advice is binding and he will be helpd accountable for it.

Tell him that is sees what he says.
Click to expand...

No he is not.

He is just a salesperson with his own interests at the forefront.

He’ll never give advice that moves the customer forward at his own detriment.
 
SauRoNZA said:
You should move it because their fees are outrageous if nothing else.

Go have a real look on their online portal how most of your money disappears before it’s even invested, then also disappeared afterwards in management fees, not the performance bullshit the broker shows you which only looks at money inside the investment.

Drop the broker and go to anyone Sygnia or 10X that allows you to go direct and have little to no fees for admin and management bullshit.
Click to expand...
Of you have alot of other products with discovery it makes sense.. the vitality benefits are crazy.

If not then it won't make sense as posted above.

Getting advice from another independent broker will be better, generally won't charge unless you sign with them.

NB: this is not advice just my opinion, I have not done any needs analysis
 
SauRoNZA said:
No he is not.

He is just a salesperson with his own interests at the forefront.

He’ll never give advice that moves the customer forward at his own detriment.
Click to expand...
The regulation says he must, and if he goes against it he will be de-bared.
 
BadBoyGP said:
Of you have alot of other products with discovery it makes sense.. the vitality benefits are crazy.

If not then it won't make sense as posted above.

Getting advice from another independent broker will be better, generally won't charge unless you sign with them.

NB: this is not advice just my opinion, I have not done any needs analysis
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Oh I didn’t imply he should go to Discovery.

Like you said they only make sense if you go all in and even that seems like a bad idea.

The problem with all of these companies that they sell products, not investments.
 
BadBoyGP said:
The regulation says he must, and if he goes against it he will be de-bared.
Click to expand...

You realise these guys literally work for OM, Discovery etc.

This is what you sign up for when working with them.

They only advise you which product to choose within the scope of the company they work for.

Also…regulations…yeah we know how well that works.

Besides the fact there is absolutely no need to burn your money on these glorified sales people, it will save you millions over your lifetime avoiding them.
 
SauRoNZA said:
You realise these guys literally work for OM, Discovery etc.

This is what you sign up for when working with them.

They only advise you which product to choose within the scope of the company they work for.

Also…regulations…yeah we know how well that works.

Besides the fact there is absolutely no need to burn your money on these glorified sales people, it will save you millions over your lifetime avoiding them.
Click to expand...
I have been working in this industry for over 20 years, the regulator is no joke.

You get the sales people, but they don't sit in the long term segment besides 1.1b ( funeral)

My suggestion to the OP is make mention that he will need to provide proper advice otherwise he will hold them accountable.
 
These "regulated" RAs have made financial advisors and the companies they work for extremely wealthy at the detriment of investors.
  1. Your new"advisor" is going to make a lot of money, and lose you a LOT with Discovery. Tell him to take a hike.
  2. Section 14 the lump sum of your existing RA to Sygnia or 10x.
  3. Weigh up stopping your contributions and look into investing into a dollar denominated fund if you don't want to get caught with your pants down when the Rand tumbles in the next 10yrs.
 
Go for the guys with the lowest fees like Sygnia. That extra 1% you save will go to your investment and help a lot with the growth of your fund.

Yes you might get some other benefits from Discovery like the vitality, but if the benefit does not end up in your investment, then you will be loosing money.
 
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