Adding to RA - which option is best

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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Sunrise24 said:
Took out an Old Mutual Max Retirement annuity in 2014. In 2017, experienced some financial difficulties and made the policy paid up. Every month, Old Mutual recovered expenses that they incurred for commissions and administrative costs. Returns from the investment were used to pay these costs.

When I was financially back on my feet, I transferred this RA to 10x. I had to incur a transfer cost payable to Old Mutual, but recovered these in the preceding years with 10x.

From my experience so far, you won’t go wrong with 10x. No commissions and low fees.
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So what are the options at 10x and insignia on what to do with the money at retirement? Are they going to be much the same as a Sanlam or Omu?
 
lkpat said:
So what are the options at 10x and insignia on what to do with the money at retirement? Are they going to be much the same as a Sanlam or Omu?
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Honestly, Sanlam and Old Mutual are "old school RA's". Its as if you drive a datsun from 1975 in 2023. Things and products changed over time. Getting better and smarter (and more COST efficient for the client/customer).

Ps, nothing wrong driving a Datsun in 2023!

Then, if you want to go Sygnia, just do a section 14. You can move your existing RA, and topup at Sygnia.

I dont have any 10x knowledge or savings (otherwise I could have commented).

I always say, pull a statement from your current RA provider, and see how it compares to the 0.54% from Sygnia (as in charges)
 
lkpat said:
So what are the options at 10x and insignia on what to do with the money at retirement? Are they going to be much the same as a Sanlam or Omu?
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Much the same in terms of combination of lump sum and living annuity
 
I've currently got a RA with Coronation and after reading this, had a look at the fees etc they charge looks to be 1.67% per annum. I've had this one going with them since 2019 and looking at changing to one with lower fees.

Currently after reading all the above, I'm worried that I'm not getting the best returns and being charge quite abit on annual fees.

I do not have a broker and have taken the task of learning more about it to better understand. Currently my RA is under R100 000 and looking at moving it under the section 14 transfer.

Is it worth transferring it or better to leave it and start a new one somewhere else?

Thank you in advance for the advice.
 
Quinton1275 said:
I've currently got a RA with Coronation and after reading this, had a look at the fees etc they charge looks to be 1.67% per annum. I've had this one going with them since 2019 and looking at changing to one with lower fees.

Currently after reading all the above, I'm worried that I'm not getting the best returns and being charge quite abit on annual fees.

I do not have a broker and have taken the task of learning more about it to better understand. Currently my RA is under R100 000 and looking at moving it under the section 14 transfer.

Is it worth transferring it or better to leave it and start a new one somewhere else?

Thank you in advance for the advice.
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Its a wake up call in short. Glad you took the time in getting a statement and ask questions. The power is in your hands (after all).

I would look at performance also. Some unit trusts are really "BANGING" if I can call it that, as in 150% over the last 5 years.
 
Quinton1275 said:
I've currently got a RA with Coronation and after reading this, had a look at the fees etc they charge looks to be 1.67% per annum. I've had this one going with them since 2019 and looking at changing to one with lower fees.

Currently after reading all the above, I'm worried that I'm not getting the best returns and being charge quite abit on annual fees.

I do not have a broker and have taken the task of learning more about it to better understand. Currently my RA is under R100 000 and looking at moving it under the section 14 transfer.

Is it worth transferring it or better to leave it and start a new one somewhere else?

Thank you in advance for the advice.
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Anyone having an existing RA, I learned this a few years ago. Select an interest bearing fund (usually with Unit Trusts), where you earn more interest than paying fees (then its for FREE) *wink* *wink*. Every 2 or 3 years, just sell some of the UT (shares) and re-align and just continue!
 
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Don't waste your hard-earned money on an RA. Rather open up an offshore bank account and save your money in hard currency offshore.
 
zerocool2009 said:
Honestly, Sanlam and Old Mutual are "old school RA's".
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There are no such things as old school RA's. The rules of investment have not changed. Both these companies offer the same range of investment vehicles in their RA's as any of the other newer companies. I think you are confusing the RA with what the investor chooses to do with the money after retirement.

I am not saying one should invest with Sanlam or Old Mutual and I am also not saying that good investment returns of the past is an indication of future performance .

What I am saying is that one should not move your RA investments from one company to another without being prepared to pay the cost. You lose a lot of money every time you move no matter what the agent/broker says - especially if you are close to the end of the investment period,
 
Stonemason said:
There are no such things as old school RA's. The rules of investment have not changed. Both these companies offer the same range of investment vehicles in their RA's as any of the other newer companies. I think you are confusing the RA with what the investor chooses to do with the money after retirement.

I am not saying one should invest with Sanlam or Old Mutual and I am also not saying that good investment returns of the past is an indication of future performance .

What I am saying is that one should not move your RA investments from one company to another without being prepared to pay the cost. You lose a lot of money every time you move no matter what the agent/broker says - especially if you are close to the end of the investment period,
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There is no cost to transfer under a section 14.

Unlike the old, insurance-based RAs, new generation retirement annuities are flexible, transparent, highly customisable, and cost-effective, and remain one of the most attractive options for long-term retirement investing.
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source

Also, maybe read this: https://www.10x.co.za/blog/traditional-ra-compared-to-new-generation-retirement-annuities
 
Stonemason said:
There are no such things as old school RA's. The rules of investment have not changed. Both these companies offer the same range of investment vehicles in their RA's as any of the other newer companies. I think you are confusing the RA with what the investor chooses to do with the money after retirement.

I am not saying one should invest with Sanlam or Old Mutual and I am also not saying that good investment returns of the past is an indication of future performance .

What I am saying is that one should not move your RA investments from one company to another without being prepared to pay the cost. You lose a lot of money every time you move no matter what the agent/broker says - especially if you are close to the end of the investment period,
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Ok, in my experience it came out that the firm I was with, took clients for a WILD ride. Taking them on and winning my ombudsman case, they refunded me 10 years of investment's costs and I did a section 14. Think that is enough reason to call them "old school".
 
zerocool2009 said:
Anyone having an existing RA, I learned this a few years ago. Select an interest bearing fund (usually with Unit Trusts), where you earn more interest than paying fees (then its for FREE) *wink* *wink*. Every 2 or 3 years, just sell some of the UT (shares) and re-align and just continue!
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I am not understanding this.
 
Stonemason said:
So, you think that the Sanlams and the Old Mutuals of this world do not offer unit trust based RA's? I did a section 14 transfer between Investec and Allan Gray a few months ago and there was an initial 'investment fee' to pay,
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Before anyone moves, find out the cost on either side (step 1). Usually when you do a section 14, it takes 3 months (the full process from start to finish). Ask providers questions, thats the important part.
 
Pegasus said:
I am not understanding this.
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Ok, let me explain more in detail.

When you have unit trusts in your RA (usually Allan Gray or Coronation), you get different unit trusts. From a balanced fund, to a fund that only accumulate interest per month.

So what I am saying (with Allan Gray especially), you see the monthly cost per month.

If you take a unit trust out (as in a money market fund as per example), that fund will earn interest per month.

So if you are savy / wise, if your interest are more than your cost (its costless).

Hope it makes more sense now
 
zerocool2009 said:
Ok, let me explain more in detail.

When you have unit trusts in your RA (usually Allan Gray or Coronation), you get different unit trusts. From a balanced fund, to a fund that only accumulate interest per month.

So what I am saying (with Allan Gray especially), you see the monthly cost per month.

If you take a unit trust out (as in a money market fund as per example), that fund will earn interest per month.

So if you are savy / wise, if your interest are more than your cost (its costless).

Hope it makes more sense now
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No it doesn't. How exactly are you scoring here?
 
Pegasus said:
No it doesn't. How exactly are you scoring here?
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If you break even, its better than something being costless than a fee eating up your savings (that is how I see it).

And you can re-gear (sell and buy normal UT's) every 2 or 3 years

Its something I saw working awesomely with my Allan Gray RA. (but everyone to their own)
 
Stonemason said:
So, you think that the Sanlams and the Old Mutuals of this world do not offer unit trust based RA's? I did a section 14 transfer between Investec and Allan Gray a few months ago and there was an initial 'investment fee' to pay,
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No, that's not what I'm saying. What I'm saying is that the new school / generation RAs are very different to the old school / generation ones. It is very possible that Sanlam and OM also have new generation RAs
 
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