One vs multiple RAs

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Fuma

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If you were to spend R5k on an RA, would it be wise to spend it on one service provider vs spending R1k on five service providers, taking into account fees an other charges?

So
Option 1:
Allan Gray = R5k per month

Or

Option 2:
Allan Gray = R1k per month
Coronation = R1k per month
Sygnia = R1k per month
10X = R1k per month
Coronation = R1k per month
Easy Equities/PPS = R1k per month
 
I think eggs, basket. The problem with that is you're now potentially paying 5 times the fees.

Is your TFSA sorted yet? I'd start there
 
YingYang said:
I think eggs, basket. The problem with that is you're now potentially paying 5 times the fees.

Is your TFSA sorted yet? I'd start there
Click to expand...
I just opened one TFSA. So R33k p/a is not enough for retirement
 
I have three currently. Allan Gray, coronation and sygnia. A mix of active and passive. No harm in having more as long as one doesn't have fees that are tremendously more.
 
I am no investment adviser. Spreading it that thin is all good and well, but I would check the value you'll be paying in fees. Also, would a couple not be better to achieve compound interest from one or two bigger funds? Also, I'd want to check where the fund managers are investing into to make sure there's no overlap in their investment strategy.

I just canned 3 of my funds (not they were really that big) and put them all into a single fund. It works for me. It may not work for you.
 
Fuma said:
If you were to spend R5k on an RA, would it be wise to spend it on one service provider vs spending R1k on five service providers, taking into account fees an other charges?

So
Option 1:
Allan Gray = R5k per month

Or

Option 2:
Allan Gray = R1k per month
Coronation = R1k per month
Sygnia = R1k per month
10X = R1k per month
Coronation = R1k per month
Easy Equities/PPS = R1k per month
Click to expand...

You are doing diversification wrong.

The point isn't to have your stuff with different people, it's to have your money invested in different things. So the underlying instruments would need to be quite different which I doubt they really are as they all offer much the same options.

If they are all just investing it in the same stuff (which they generally will due to regulation) you aren't really diversifying anything while losing a hell of a lot on fees.

Now if you wanted to go 50/50 with Active vs Passively managed that I could sort of understand but not sure it would be worth it.

Personally I would have put it all into 10X...
 
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I”ve got 3.
One each for when I turn 55, 65 and 75.
 
YingYang said:
I think eggs, basket. The problem with that is you're now potentially paying 5 times the fees.

Is your TFSA sorted yet? I'd start there
Click to expand...

At worst you'll pay the average of the 5 funds costs so if 2 fund charges 1%, 1 fund charges 1.5% and 2 fund charge 2%, you average fees in total will be 1.5%.

And 5 times the debit order fees (if that is a thing in your type of bank account).

RA first, then TFSA. A TFSA does not give you an income tax benefit (which get better and better the higher your income tax rate is). The only better thing is no regulation 28 limits and free to withdraw anytime and not having to invest 2/3rds of it in a Life/Living Annuaty when retiring.
 
Last edited:
supersunbird said:
At worst you'll pay the average of the 5 funds costs so if 2 fund charges 1%, 1 fund charges 1.5% and 2 fund charge 2%, you average fees in total will be 1.5%.

And 5 times the debit order fees (if that a thing in your type of bank account).

RA first, then TFSA. A TFSA does not give you an income tax benefit (which get better and better the higher your income tax rate is). The only better thing is no regulation 28 limits and free to withdraw anytime and not having to invest 2/3rds of it in a Life/Living Annuaty when retiring.
Click to expand...

A TFSA is not taxed when withdrawing (and is funded with post-tax money). An RA/pension fund is funded with pre-tax money (in the case of a pension, or by virtue of a tax rebate in the case of an RA) and taxed on withdrawal - subject to certain tiers, criteria, etc
 
Fuma said:
If you were to spend R5k on an RA, would it be wise to spend it on one service provider vs spending R1k on five service providers, taking into account fees an other charges?

So
Option 1:
Allan Gray = R5k per month

Or

Option 2:
Allan Gray = R1k per month
Coronation = R1k per month
Sygnia = R1k per month
10X = R1k per month
Coronation = R1k per month
Easy Equities/PPS = R1k per month
Click to expand...

OK, first question, do you have a work pension fund?

One option is to use a passive fund RA if your work fund is active or the other way around. This is what I am doing.

Or as suggested you can have an active fund RA (Coronation, Allan Gray, PPS(?)) and a passive RA (Sygnia or 10X)
 
supersunbird said:
OK, first question, do you have a work pension fund?

One option is to use a passive fund RA if your work fund is active or the other way around. This is what I am doing.

Or as suggested you can have an active fund RA (Coronation, Allan Gray, PPS(?)) and a passive RA (Sygnia or 10X)
Click to expand...
I do have a pension fund at work. I also have an RA (old generation) with Sanlam. Ignorance on my part and my FA not doing his job. :p
 
Fuma said:
I do have a pension fund at work. I also have an RA (old generation) with Sanlam. Ignorance on my part and my FA not doing his job. :p
Click to expand...

Well, my work fund is passive (10X), so my personal RA is active (Coronation). I chose not to go with their Balanced Fund, but my own list of Coronation unit trusts inside the RA, subject to regulation 28 compliance limits). I also have a static RA which is the money of a previous employers pension fund that is growing slowly but surely. So work fund and 2 RAs

The benefit of multiple RAs is that its more easy to then phase in access over the years in retirement, you don't just access 1 at the beginning of retirement (or just once later cause you initially just accessed the work fund).

You can look at how on track you are for retirement with this rule of thumb formula:

https://mybroadband.co.za/vb/showth...etire-quot?p=21477647&viewfull=1#post21477647
 
supersunbird said:
Fixed term RA's or unit trust ones?
Click to expand...

All 3 are UT one's.

I have a paid-up, high fee, ripoff Old Mutual RA that has had +- R35000 in it for the last 10 years or so (No growth).
I don't count it as an investment.
I use that one as a reminder not to use Financial advisers or Insurance companies for investing.
 
Rather silly. If you want to diversify then diversify against an actual risk. All these providers will be using trust accounts so they're not gonna run off with your money
 
supersunbird said:
At worst you'll pay the average of the 5 funds costs so if 2 fund charges 1%, 1 fund charges 1.5% and 2 fund charge 2%, you average fees in total will be 1.5%.

And 5 times the debit order fees (if that is a thing in your type of bank account).

RA first, then TFSA. A TFSA does not give you an income tax benefit (which get better and better the higher your income tax rate is). The only better thing is no regulation 28 limits and free to withdraw anytime and not having to invest 2/3rds of it in a Life/Living Annuaty when retiring.
Click to expand...
So you agree that if all charge 2% he'd pay 5 times the fees? Hence me using the word 'potentially' :D

Yes I'm bored!
 
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