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Investing

Understanding self-directed investment fees

The number of do-it-yourself investors is on the rise. This trend is driven mostly by technology enhancements and factors such as the rise of online trading platforms like My Wealth Trader, a sophisticated digital investment platform brought to you by Old Mutual Wealth.

This platform empowers you to seize control of your financial future by giving you access to over 20,000 instruments across global exchanges.

Although navigating the world of self-directed investment accounts can be empowering, it is also a daunting task. One of the key aspects to mastering this is understanding all the fees associated with your investment.

Ensuring transparency in pricing is paramount in self-directed investment accounts. Investors must understand the different fee structures to manage their investments effectively. This includes a clear understanding of trading commissions, which can vary depending on the type of securities and transactions. Additionally, annual or monthly maintenance fees are often overlooked and can steadily erode returns over time.

Common fee types explained

Here are some of the common fees and charges you should be aware of:

  • Trading commissions/Brokerage fee: These fees are charged per trade and can vary across different types of securities. Understanding these fees is essential for budgeting for each trade.
  • Minimum commission: This is the minimum fee to be applied on all trades. These are charged per exchange.
  • Platform fee: This is an ongoing fee, either fixed or percentage-based, for accessing or using a specific service on a platform. Regular charges for account upkeep can add up. Investors should consider these when calculating their investment growth.
  • Expense ratios: Particularly relevant for mutual funds and ETF investors, these annual fees are a percentage of the investment and cover the fund’s operational expenses.
  • Margin fees: For those who trade on margin, understanding the interest rates and how they’re applied is crucial to avoid unexpected debts.

Navigating hidden fees

Investors should also be aware of less obvious fees which can subtly decrease investment returns. These include:

  • Foreign Transaction fees: Investing in international markets can attract additional costs, including currency conversion fees.
  • Custodial fees: Fees charged for holding assets in safe custody.
  • Transfer fees: Fees charged to portfolio from one custodian to the other.
  • Cash management fees: Fees charged on cash balances in the portfolio and often implicit credit interest figures.

Conclusion

By being aware of both common and hidden fees, investors can better position themselves for successful financial outcomes.

Remember, informed investors are not just prepared; they are empowered to make the best decisions for their financial future.

At Old Mutual Wealth, our approach to fees is steered by fairness and transparency.

There are no hidden fees surprises with My Wealth Trader.

We’re upfront on pricing and our fee structure will always be clear so that investors know exactly what they are paying making sure there are no surprises or hidden costs.

With My Wealth Trader there are no platform fees, low trading fees and no minimum investment amount making it one of the most cost-effective platforms in the market.

You are protected by state-of-the-art security protocols and supported by a formidable trading and analysis tool.

You also have access to specialist insights, in-depth research and customised portfolio reports.

If you’re prepared to set the pace and take charge of your own portfolio, visit us at My Wealth Trader. You can also download the My Wealth Trader app from the Google Play Store or Apple’s App Store. 

For more information, don’t hesitate to reach out to us via email at [email protected] or call us at 0860 ONLINE (665463).

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