I’ve wanted to do an Easy Equities review for a while now since they won the Intellidex Top Stockbroker award. When I started investing, I knew about Easy Equities and their affordable offering, but I still chose to go with a trading platform offered by a bank. It is strange how the mind works sometimes. I did not trust any platforms not associated with a bank. In the back of my mind I always knew that there was a cheaper option though. Every month when that platform fee went off, I cringed a little.
At the start of 2018, I went on a cost cutting mission. My own, personal fees must fall campaign. When the announcement was made that we could move our Tax Free Savings Accounts (TFSA), I started shopping around. Easy Equities stood out since they had no platform fee and trading costs were only 0.25%, with no minimum fee. I did not find any good reviews and did not move until July as a result of a recommendation by the Fat Wallet Team.
Ease of use
Registering the account was easy. Loading the documents was intuitive and I was FICA’d within two days. That was on me though, there was an error in my address (Shit happens). Navigating the platform is straight forward, with the slider at the top allowing you to page between accounts. One of my friends helped with the website (If you ever read this bud, well done).
Of the bat you get 5 accounts. The first two are demo accounts in ZAR and USD. You also get regular trading accounts in ZAR and USD and finally a TFSA. You pay into them individually by specifying the account number as a reference number during the Electronic Fund Transfer (EFT). If you made a mistake you can always transfer between accounts. Just keep your annual TFSA limit in mind when doing this. At this stage I use the ZAR trading account and the TFSA.
In the ZAR account you can buy any South African shares or Exchange Traded Funds (ETFs). You do not get to specify the price at which you buy, as with most other platforms. Instead you will pay the spread when you buy shares. However, when you buy ETFs in you Easy Equities account, the spread is managed by the market maker, if you buy between 09:30 and 16:30.
As a result, I mainly buy ETFs on Easy Equities. The negative reviews on their platform mainly stem from the massive spread that is sometimes paid on shares with low liquidity. Larger shares with good trading volumes, like top 40 shares, will also have decent spreads.
One of the stunning things about their platform is that you can buy fractional shares. This means that you can invest microscopic amounts and the associated costs are still minimal, because there is no minimum fee. This is great for investors just starting out or if you don’t have massive piles of cash to invest at once.
They offer a Retirement Annuity (RA) as well at a fixed fee of 1%. This is not expensive, but you can do better in South Africa. Again, I’m not a big fan of RAs for the main reason that it does not allow me to retire earlier than 55. You can read more on this in my article why I don’t invest in retirement annuities.
The next innovative feature is their thrive initiative. This rewards you for completing simple tasks like doing an ETF quiz or buying certain share packages. Obviously, they are going to make it worth their while by including tasks like inviting new investors to open an account with them. However, what you get for your effort is no fee transactions on certain shares and ETFs. Sounds fair to me.
On most platforms you input the amount you want to spend on shares and the fees are then added to this amount to calculate your total investment cost. Easy Equities allows you to specify your final investment costs. This saves you the hassle of iteratively fine-tuning the amount of shares you want to buy until your total investment cost equals your available funds. This makes investing even quicker than it already is.
What I would change
They have baskets of shares that you can invest in. At this stage they have 11 basket options that are invested according to different strategies. My concern is the management strategies of these baskets. If you, for instance buy a Top 40 share, the index is self-correcting. In other words, if a company’s market cap becomes too small, it falls out of the index. Will these baskets be adjusted if shares are not attractive anymore and who makes this call? I mean there is a Jan Braai basket. Do I trust him with my meat? Definitely. Do I trust him with my retirement money? Fuck no.
I really like the Easy Equities offering and like seeing them do so well. They offer a low-cost platform, perfect for investing in ETFs. When I started out I had a lot of questions regarding Easy Equities and I hope that this article answered some of the questions you might have as well. I don’t earn a single cent for this Easy Equities review, just in case you thought I am getting a kickback.
Be safe out there,
Quote of the week
“Under capitalism, man exploits man. Under communism, it’s just the opposite.” – John Kenneth Galbraith
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