Do Allan Gray / Liberty "platform" administration reflect underlying unit trust TER?

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Need4Speed

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So I had a good, hard look at the transaction log on my Libery RA recently, and noticed I am being robbed blind. Sigh.

Looking at a friend's Allan Gray account for comparison, the fees are lower, e.g. Allan Gray's "effective administration fee" on a R20k balance is around R2, vs Liberty's R120 "Management Fee" + R25 "Contribution Charge" (WTF) on a R70k balance. Needless to say, this damaged my calm :mad:

A section 14 transfer will cost me around 9%, but before even considering this, I have a question: My friend's underlying unit trusts have TER's of around 1.6%. Obviously the R2 can't cover this, so my question is whether the Allan Gray platform, and other platforms in general (like the Liberty abomination) reflect unit trust TERs, or must this be added over and above?

I haven't had a chance to look, but I hear Sygnia offers funds with TERs of 0.4%. Can anyone comment on this (any other nasty surprises I should know about)?

Thanks
 
TER is Total Expense Ratio that is not explicitly charged. It is an expression of the expenses that the underlying unit trust fund experiences. Fund performance on a fund fact sheet (minimum disclosure document) is net of TER. TER consists of things like rent, admin costs, salaries that the actual FUND incurs.

A normal platform has the following fees:
Admin Fee (that is paid to Liberty / Allan Gray as a platform)
Fund Manger Fee (That is paid to the underlying fund manger ie Allan Gray/ Investec/Coronation etc)
Broker commission (Paid to the intermediary)

Your actual fee experience will be these 3 added together.

I am assuming that your RA is on a LISP Platform not a Life Platform.

Allan Grey Is a well priced platform.
 
This is why I'm in a process of moving my RA off Discovery and onto Allan Gray + new one with Sygnia too.

Fees cost in insurer based investment cost a lot and their FAs tell u all wonderful stories until u start point to facts
 
Well, what I can say ...

I have a RA with Liberty. They charged me R40 000 in fees over 8 years for R40 000 growth ! (How bloody nice hey). I am moving it to an alternative where it wont cost me an arm or an leg !
 
One thing I must say ...

At Liberty there are so much fees it is crazy.

I have an RA. Fees are deducted for the overall value. Then if you put lump sums on, fees are taken for that as well.

Lets say I have a debit order (which I currently have). 50% of my DO goes as fees ! And as I stated before, it aint a mother big amount either.

Stay clear from Liberty, or any sales company or person who promote them ! Really ! I have first hand experience with this crap. And with crap I mean fees.
 
I still can't get my mind around it. My fund is 4 times the value, and I pay a only 3rd of his in monthly administration fees ... how the hell... what value do they offer for that price? Call you every week to hear how you're doing? Know all your kids names and their birthdays and extramural activities? Send a gift on your birthday?

And that "Contribution Charge", is that for having a debit order?

Sure, the TERs are inside the relevant funds, so I can't see directly what those cost me, but it gives me an idea and I can decide if they are worth it if compare the various funds growth.
 
Pulled the trigger today. I'm jumping ship to Sygnia. I have (had) 2 RA's with Liberty, one paid up and one still in force. Each RA was invested in 4 underlying funds. I paid approx R120+R25 for EACH fund(i.e. x4) PLUS a R20 "Ongoing Commission Recovery Fee" for the funds in the paid up RA.

gazzak said:
Fund performance on a fund fact sheet (minimum disclosure document) is net of TER.
Click to expand...

Net of TER? So if a fund fact sheet claims 12% growth with a TER of 1.6% the fund grossed 13.6%, correct?
 
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Liberty is very wise. I checked today again. They have an on-going recovery fee that is going up and up. (Now even if my ex broker told me, go FU yourself), they still recover that, lol.

Then two management fees that is 0.25% of the portfolio. And that is per month.

In 8 years, I didn't gave my broker any questions until Jan 2016 (I thought he was on my side), and boy, I WAS SO WRONG

Lets say my debit order is R2000. Liberty charge me R1000 a month for admin fees. And my portfolio is the same as yours SSB.

I really want to cry, but tears wont solve my issue. I typed a very nice big long letter to Liberty tonight.

It really doesn't help I fight with them to be honest. All they are saying, look at the contract.

What will it help to run to the ombudsman ? I can make a case for how I was kicked away like a dog. And Liberty now threw the next bone for me, and you know how loyal dogs are.

It is easy if a homeloan division at a bank says if I cant make peace, go to another bank to find a homeloan.

What do one do if the broker firm that you have been for years say FU ... Liberty will get their money one way or the other, that is for sure.

Like I said to the Liberty broker, come high or low water, Liberty is taking their cut no matter what the markets does.
 
I got a quote today from Liberty .... 9% fees P.A

L O L !

I asked them can they work on their cut, they replied "They cant do anything as it isn't a signed contract" ... But wait, if you sign it, they will reply "Its on the contract and that cant be changed" !
 
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I hope you guys are reading the fine print / the fees section ! That is what opened my eyes in 2016 so far !
 
Just a quick follow-up post, one year later. Liberty took the liberty and helped themselves to 6% for the Section 14 transfer (after about 10 years with them).

Overall I'm happy with the move, except for the fact that Sygnia does not state the TER up front. For anyone reading this: Sygnia claims 0.4% "admin fee" but the actual TER is 0.96%. Still not cheap, but better than before!
 
Need4Speed said:
Sygnia claims 0.4% "admin fee" but the actual TER is 0.96%. Still not cheap, but better than before!
Click to expand...

Which fund are you invested in?
They have many funds, and even third party funds on their platform. The claim of the .4% fee only applies if you invest only in Sygnia passive funds. If not, your costs will depend on the fund's management fee + a .57% admin fee will be charged if you invest in a 3rd party fund.

The .4% is also not the whole story. This is the managment fee charged for a fund like Sygnia skeleton balanced 70 fund. The total cost for this fund is actually .65% which includes the .4% management fee, fund costs (like audit fee) and transaction costs (like JSE brokerage).

Compare this .65% to an investment on the Allan Gray platform in the Nedgroup investments Core Diversified fund (also passive) where the TIC including admin fee is 1.07%. For comparable active funds on the Allan Gray platform you pay 1.67% for the Allan Gray Balanced fund, 1.86% for Coronation Balanced Plus and 1.82% for Foord Balanced.

This does not include financial advice fees - one of the reasons why Libery is a lot more expensive is because you are forced to have and pay for an adviser in their products.
 
Need4Speed said:
Just a quick follow-up post, one year later. Liberty took the liberty and helped themselves to 6% for the Section 14 transfer (after about 10 years with them).

Overall I'm happy with the move, except for the fact that Sygnia does not state the TER up front. For anyone reading this: Sygnia claims 0.4% "admin fee" but the actual TER is 0.96%. Still not cheap, but better than before!
Click to expand...

https://www.sygnia.co.za/docs/defau...alanced-70-fund---ffs_2016_skel.pdf?sfvrsn=34

sygnia.JPG

:confused:
 
Need4Speed said:
Just a quick follow-up post, one year later. Liberty took the liberty and helped themselves to 6% for the Section 14 transfer (after about 10 years with them).

Overall I'm happy with the move, except for the fact that Sygnia does not state the TER up front. For anyone reading this: Sygnia claims 0.4% "admin fee" but the actual TER is 0.96%. Still not cheap, but better than before!
Click to expand...

The fees should be 0.62% for Sygnia Skeleton 70 (I assume their fees went up a little)
https://www.sygnia.co.za/our-company/news-insights/2017/01/26/which-ra-is-most-cost-effective
 
Just an update from my side busy doing my section 14 now (getting quotes from firms).

Liberty is a sad sad story. Some stats:

Value R350 000
Debit order R2500
Fees per month (1st June : R1050)

What a joke !
 
zerocool2009 said:
Just an update from my side busy doing my section 14 now (getting quotes from firms).

Liberty is a sad sad story. Some stats:

Value R350 000
Debit order R2500
Fees per month (1st June : R1050)

What a joke !
Click to expand...

That is a right royal rip off.
 
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