This article first appeared in City Press, the 3rd of January 2015 edition
One of the most difficult things about investing when one finally decides to venture into the world of shares and market movements is finding a platform that is beginner investor friendly. Often eager investors give up when they are faced with a trading or investing platform that is difficult to navigate and isn’t intuitive – you feel like you need a manual just to buy a handful of shares.
Easy Equities was my light at the end of the tunnel and when I first stumbled upon the platform (thank you, twitter) signing up and finding my way was pretty simple. Processing the paper work was a breeze, the fee structure easy to understand and the site’s layout was accessible. The simplicity of their product offering: equity trading and tax-free ETFs, limits the amount of products available to investors which may be beneficial for a newbie who wants to invest in their favourite brand’s shares without getting lost deep technical strategies.
Beginner investors also have the option of opening a demo account and playing with fake money in case they’re feeling jittery about their investing strategy.
The easy equities platform is one of the cheapest platforms for investors. There is a 0.25% minimum brokerage commission fee and no monthly fees apply. Investors can invest as little as R5, and – apart from the applicable tax payments and transaction costs, The Easy equities platform only caters for local shares so investors aren’t exposed to offshore shares.
One thing that beginner investors will appreciate is the ability to own fractional shares should you not be able to afford the whole share. For instance, if you wanted to buy Naspers shares but don’t have R2,000 at your disposal, you can buy a fraction of the share. Easy Equities then issues you with a CFD (contract for difference) which includes the benefits of share ownership even though you do not own the underlying share completely. This is known as a FSR (fractional share right).
When it comes to Tax-free saving, Easy Equities currently offers 47 different tax-free ETFs that investors can choose from. The fee structure is still 0.25% brokerage commission fee and investors are exempt from securities transfer tax, capital gains tax, dividend withholding tax on dividend earned, and tax on interest earned. As with all tax-free savings products, the annual and lifetime contribution restrictions still apply so you have to keep a close eye on your contributions.
For a novice investor who is looking for a cheap, easy to navigate and efficient investing platform, Easy Equities comes highly recommended. Parents can also open trading accounts for their children, making it ideal for those who want to start their children off young.
Looking at other online trading platforms
When compared to other trading platforms such as PSG online or Standard bank Online trading, Easy Equities falls short in that it doesn’t offer other types of products such as futures, off shore shares (offered by PSG) and warrants. This makes it less suitable for someone who would like to spread their trading options.
On cost, however, Easy Equities is a winner. Stockbroking and online trading platforms specifically geared for traders usually carry a monthly fee, or have a minimum trading fee. For instance, Standard bank’ monthly ‘account maintenance’ cost is R70. FNB’s share trader platform offers comes at a lower rate of R49 per month, but options are limited to JSE shares and Krugerrands when it comes to product offerings. Standard Bank also offers phone trading (at an extra cost) and customers have to be aware of other costs such as settlement fees, share and portfolio transfers, and withdrawal fees.
PSG’s platform, like Standard and GT247.com offers a diverse product range. Investors can choose to invest in local and offshore shares, single stock and currency futures, and CFDs among others. It’s important to note that these platforms are geared toward the more experienced investor who has an in depth understanding of technical analysis and can use different trading strategies to maximise profits. Sanlam’s iTrade platform is also very popular with traders and their costs they are competitively priced. iTrade clients pay a monthly fee of R50 (first month of trading is free). If the brokerage fee exceeds R300, the monthly fee is waived. Their brokerage fee is structured according the value traded and important to consider when comparing costs.
As most trading platforms exclude tax-free savings accounts, you’ll also have to take into account the various taxes and STRATE (settlement transaction) fees that apply. If you feel that you are at this level, you can check out these local trading platforms
- Standard Bank online trading: securities.standardbank.co.za
- PSG Stockbroking: psg.co.za/wealth/stockbroking
- Sanlam iTrade: sanlamitrade.co.za
- Absa online trading: absastockbrokers.co.za
- FNB ShareInvestor: fnb.co.za/share-investing
- GT247.com: gt247.com
Buying BEE Shares
BEE share trading was an initiative that a few JSE listed companies took up in order to increase the number of black investors invested in their companies. Currently there are nine BEE shtare schemes registered, with MTN’s Zakhele scheme recently relisting on the JSE. While the concept is noble, the jury’s still out on the real effectiveness of BEE share schemes and the role they play in increasing the wealth of previously disadvantaged individuals.
There are several companies with BEE share schemes, Vodacom has YeboYethu, Sasol has Sasol Inzalo and Multichoice has Phuthuma nathi, to name a few. For those individuals interested in investing in BEE shares, the online platform Equity Express is a great place to begin. Once you know which BEE shares you’d like to invest in, you can open an account on their website which is equityexpress.co.za or contact their call centre 011 324 5400. Alternatively you can email them at firstname.lastname@example.org.