Easy Equities good or bad?

Toothless said:
https://www.psg.co.za/wealth/stockbroking/local-shares/how-to-invest#Direct-client-fees
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Thanks FNB it is for now.

Waiting for Investec to contact me about their offering as well. When I spoke to the guy at my future employers "intro day" he said they don't charge minimum brokerage and their rate was something like 0.4%.

Their monthly fee is killer though, R260 for the next few years and that increases to like R450 when we qualify.

The JSE/powers that be really need to step up and make it cheaper/easier for the everyday man to invest. ABSA has a pretty decent ETF Only offering (no monthly account fee and R20 minimum brokerage) but I prefer building my own portfolio.
 
Shalin_ZN said:
Thanks FNB it is for now.

Waiting for Investec to contact me about their offering as well. When I spoke to the guy at my future employers "intro day" he said they don't charge minimum brokerage and their rate was something like 0.4%.

Their monthly fee is killer though, R260 for the next few years and that increases to like R450 when we qualify.

The JSE/powers that be really need to step up and make it cheaper/easier for the everyday man to invest. ABSA has a pretty decent ETF Only offering (no monthly account fee and R20 minimum brokerage) but I prefer building my own portfolio.
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I agree.

No matter who you use, I think the most important thing is that when you invest in shares, that you ensure you are the rightful owner of that shares. I see that nominee accounts are commonplace, but would you, in 12 months, trust an unknown company holding R60k+ of your money in their name? And best of all, they can actually move or sell your shares legally?
 
Toothless said:
Take a look at the bold part below. You are not the owner of the shares in legal terms.
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I might be remembering wrong but I'm sure that was only applicable with the part shares.

The full shares are in your name.

****

Yes I'm quite right, read the last paragraph of your very own quote.
 
SauRoNZA said:
I might be remembering wrong but I'm sure that was only applicable with the part shares.

The full shares are in your name.
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Nope, even full shares are registered in the nominee's name. Nowhere on their website do they mention anything else, accept that share are held on your behalf in the company's name.

But, this seems to be common practice lately, therefore their ability to offer such cheap trading. Everything is done in the company's name offering them discounted rates probably. Just go read up on nominee accounts. You are not the real owner of the shares.

While relatively safe, you are not protected from companies moving or selling your shares and other types of fraud though.
 
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Toothless said:
Nope, even full shares are registered in the nominee's name. Nowhere on their website do they mention anything else, accept that share are held on your behalf in the company's name.
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The way I read that it will be handled the same way as you described PSG would hold onto the certificates on your behalf and they are still issues in your name.
 
SauRoNZA said:
The way I read that it will be handled the same way as you described PSG would hold onto the certificates on your behalf and they are still issues in your name.
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No, when you buy through PSG, the JSE issues the share certificate in my name. The certificate is sent to PSG. PSG offers me two options: 1. They keep the certificate. 2. They courier the certificate to me.

In EE's case, the share is registered in the nominee company's name. They 'keep it on your behalf'. There is a trading register where they note you as the rightful owner. However, legally the shares are in their name and they are the legal owners. They can legally or illegally move or sell these shares without notifying you.

This is the reason why you cannot get a share certificate in your name from EE. The shares is not in your name at all. The certificate bears the name of the nominee company.

Take a look at the links I posted above.
 
Here is the last paragraph of my quote above:

When you purchase Whole Securities, you become the beneficial (true) owner of all those Whole Securities, which will be held by FWT Nominees on your behalf. FWT will ensure that you are reflected as the beneficial owner of your Whole Securities in our books of account.
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Take a look at this:

https://the-international-investor.com/investment-faq/stock-broker-account-safety

Your shares are legally owned by a non-trading subsidiary of your stock broker, known as a nominee company. (Sometimes a third-party company hired by your stock broker will be used instead of a subsidiary – more on this later on.) However, while the nominee company is the legal owner of the shares, you are the beneficial owner, meaning that you have rights over them. Your stock broker will keep records of which client is the beneficial owner of all the shares held by the nominee company, trade your holdings according to your instructions and pass cash from the sale of your shares or from dividends on to you.
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There is a big difference between legal owner and beneficial owner.

They still remain the legal owner of the shares and being a beneficial owner, you merely have rights over them. So, legally speaking, nothing stops them from selling your shares or moving them to other portfolios without you even knowing it. They remain the legal owner.

The risk is just too big when investing large amounts of money as you are not really the owner of the shares.
 
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SauRoNZA said:
Makes sense. Thanks.

Would the likes of most ETF's not be the same then?
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Yes, but if you, like me, invest 200k+ per year in ETFs, do you want GT247.com to look after this money or a company like a bank or Sanlam rather?

This is why I say, nothing wrong with EE, but I prefer share certificates registered in my name for a start. They are okay for smaller investments. If some director of GT247.com decides to raid accounts and sell of R1bn in shares and run away, I know my losses will be limited.

If this happens in a bank or large investment company, I know they have the capital to refund me my losses. Not so sure about GT247.com. Also, this is not always possible to do in a bank or large company without someone knowing about it within hours. They can also limit their losses.

But, at GT247.com such incident will only become clear when people can't withdraw money anymore. And then police will first need to investigate. This could be days or weeks after something like this happens, as the case with MF Global.

I'd rather like EE to ask additional fees for those who want share certificates issued in their names. I'd gladly pay this additional fee and also increase the money I invest through them in the process.
 
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But isn't that the case for ETF's buying a basket of shares too?

Aren't the shares also just kept on Satrix's name on your behalf?
 
SauRoNZA said:
But isn't that the case for ETF's buying a basket of shares too?

Aren't the shares also just kept on Satrix's name on your behalf?
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Yes. If you invest 100k a year in etf's, where do you think your 100k will be safest?

But, if you do not mind another person or company registered as the owner of your shares, then EE is perfect.
 
What worries me a bit, but is not a train smash as long as they are liquid, is the way in which they operate. This is also the reason they are able to offer trading so cheap.

Lets say they get 15 000 orders today from 10 000 clients for the purchase of 10 million shares in 300 companies.

I am 100% sure your purchase is not activated on the Jse in real time. The company may take hours, days, weeks or even months before they buy the actual shares in the Jse. I think there may be times when they dont buy at all.

But, they will wait to buy shares at a lower price you bought it at. They will then buy tens of millions of shares in 1 company in a single transaction, making money from everyone who paid the broker fees, jse fees, etc, as well as the lower share price.

This also why the shares are registered in their names. If it was done in yours they needed to pay fees for every client. They could then not offer cheap trading.

This also explain why some members received dividends and some not. When the dividends were paid out, the shares werent bought. So, users started complaining and the company needed to pay these dividends from their own pockets.

I do not know how strictly they are audited. Will not be surprised if they are seldomly audited by doing spot checks.

Don't know for how long they will manage to keep this operation afloat, but I will not be surprised if it, at some point in time, comes tumbling down and everything collapses.
 
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@toothless

When I heard of EE, I started wondering "how are they able to build a business in this way?"

"What is their profit model?"
I even contemplated moving my portfolio from OST to EE.

However, based on my research of EE, I have reached a similar conclusion as you.

In fact, your posts have cleared up a few uncertainties I had on my mind.

This is OT : does FNB's offering work in a similar way as EE FSR and WS ?
 
Toothless said:
Yes. If you invest 100k a year in etf's, where do you think your 100k will be safest?





But, if you do not mind another person or company registered as the owner of your shares, then EE is perfect.
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You still haven't confirmed though.



When you buy an ETF you don't get your name on the underlying shares either?



So it's no different from EE then really?

****

To be honest Satrix is a shambles of incompetence. I would rather trust EE with my money.
 
mmmig said:
What percentage of your portfolios are ETFs
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Talking to me?

Most of it. It's a safer less volatile bet in the long term.

The few single shares I have are what I consider the "gambling" side and not even part of my portfolio as such.
 
midnightcaller said:
@toothless

When I heard of EE, I started wondering "how are they able to build a business in this way?"

"What is their profit model?"
I even contemplated moving my portfolio from OST to EE.

However, based on my research of EE, I have reached a similar conclusion as you.

In fact, your posts have cleared up a few uncertainties I had on my mind.

This is OT : does FNB's offering work in a similar way as EE FSR and WS ?
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Midnightcaller, I can really not answer your question in regards to FNB and other banks offerings, as I do not use them at all. I make use of PSG and this is the way in which they work. You clearly need to state whether you want them to guard the share certificates (issued in your name) or have it sent to you.

But, if banks do work the same than EE, I would also not have a problem with that. I would rather invest with the banks when it comes to large amounts of money.

The problem is, it is actually not EE you are dealing with. They merely have created an easy-to-use platform that is linked to GT247.com. They only get commission on each share you buy.

All shares are bought by GT247.com and registered in their name. I do not know the company and I fear that a typical 'Fidentia' scam could play out there at any time. If this happens, then everyone will lose everything. Banks on the other hand will not easily allow this to happen. Besides, if something like this happens in a bank, they have the financial backing to refund investors infected. I doubt that is the case at GT247.com.

At the end of the day, I do not have problems with EE or GT247.com, but will use them in very small transactions only.
 
At the end of the day I am not saying something like this will ever happen to GT247.com. But mismanagement of client funds already happened so much in large organizations - just take a look at news articles.

In their case, the shares are in their name. They are the legal owners. They can move and sell your shares, without you knowing it to move funds around and pay clients. If you have Brown-type owners, they can sell off a few shares to buy Ferrari's or houses on the French Riviera.

This is what I do not like. I will never sleep well knowing they receive 10K of my money each month. Will never know if I will get all my money back. But, for small investments I have no problem. If the worst ever happens, than I am willing to lose the small amounts.
 
Shalin_ZN said:
GT247 were voted SA's top stockbroker of the year 2015: http://www.bdlive.co.za/investorsmonthly/2015/09/24/the-top-broker-of-the-year
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I have absolutely no problem with that. At the rates they charge, I expect nothing less in any event.

But, at the end of the day, looking at what happened in so many cases, like Fidentia, MF Global, etc., where you get a director going rogue and stealing from investors, I will never have the confidence investing 10k a month knowing they have legal ownership on my shares.
 
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