It has been proven time-and-time again that fees can be one of the biggest determinants of an investment’s return.
One of our core missions at OUTvest is to ensure low-cost, transparent pricing on all of our products and services, and to make sure that every Rand you invest is working as hard as it can to deliver a return.
With that in mind, we want to announce the arrival of our groundbreaking innovation, the Fixed ONEfee from OUTvest.
We believe it’s the first fee model of its kind in the world and it could save investors up to 90% in fees and deliver up to 60% or more on their investments.
As the name suggests, we only charge one fee for the administration of your investment, there are no charges for anything else; including Advice and Investment Management.
This even includes VAT and Transaction Costs. There is simply nothing else to pay and no hidden fees. What’s taken from your investment each month is disclosed on your investment statement in Rands and Cents.
You would be forgiven for thinking that this is nothing new, however, investors don’t typically see their total fee in Rands and Cents on their statements. This is because a significant proportion of the costs are taken directly from the fund (be it a Collective Investment Scheme or an Exchange Traded Fund) they’re invested in and don’t necessarily show up on your investment statement as part of the costs you are paying.
If investors added all of the relevant fees for their investment together, it could be as high as 3% per year, if not more.
Using a percentage-based fee also means that whenever you add more money to your investment or it grows, your fees go up – even though you are getting exactly the same service.
That’s why we introduced a fixed fee of R4500 per year for investments greater than R300 000*. Just because you invest more, doesn’t mean you should pay more.
Where you really see the difference the Fixed ONEfee makes is when you compare it to a traditional fee model of 3% per year. You can see how fast your annual investment fees grows with a traditional, percentage-based fee model as your investment’s value changes – either through contributions or investment growth.
ONEfee on the other hand doesn’t change nearly as much, and for investments greater than R2.25m the total fee is a mere 0.2% per year, which is on par with some of the most aggressive fee models in the world.
The real impact of this fee structure shows itself over time, and where it matters: the value of your investment. For example, if you invested R2500 per month into a retirement annuity, and transferred an existing retirement annuity of R250 000 then, assuming the same investment growth rate you will have R2.7 million more at retirement than if you were paying a traditional fee of 3% per year (R7.7m as opposed to R5m).**
* The fixed annual charge is likely to increase with inflation on an annual basis.
** Traditional investing is when you pay an ongoing advice, administration and Total Investment Cost (TIC). The results are modelled using a historic growth rate using a representative balanced fund. R2500 per month escalating annually at 6% per year.
We don’t know of a lower fee for a comparable service at a comparable investment value anywhere in the world, the United States included.
As mentioned earlier understanding investment fees is very difficult. They’re not like the fees we pay for everything else because investment fees are in percentages and not in Rands and Cents.
It’s also very difficult to understand the total cost of your investment because some of the fees are simply not shown on your statement.
With our ONEfee we changed the way investment fees flow in the industry to ensure that the fee you see on your statement is the only fee that is charged against your investment.
There is no other fee charged including; VAT, transaction costs, advice, fund management, custody – in short, the works.
There are no hidden fees, what you see is what you pay, and we think it’s the best value for money in the market today.
We designed the OUTvest ONEfee to shake-up the investment industry and put every Rand to work for you.
We have applied the ONEfee to our Tax-Free Savings Accounts, General Investment Accounts (also known as Voluntary Accounts) and our new Retirement Annuity.