Clarity business head Tinus Rautenbach has dismissed Purple Group CEO Charles Savage’s argument that the platform is aimed at traders rather than investors.
Clarity, owned by Investec, is currently only available to the bank’s private clients. However, the company has announced that it will be available to “all of South Africa early next year”.
The platform offers investors access to local and international shares, foreign currencies, and savings products.
The Clarity platform has no monthly fee, no admin fees, zero commission, and offers users highly competitive rates.
By launching Clarity to the public, Investec aims to make investing more accessible to South Africans and is part of the bank’s new growth strategy.
The public launch of Clarity comes amid controversy surrounding EasyEquities’ introduction of a “platform fee” as a mandatory Thrive subscription.
All EasyEquities users who do not reach level 3 of the Thrive loyalty programme will be charged R25 per month.
Clarity is widely seen as a competitor to EasyEquities and an alternative to people who do not like the new mandatory Thrive initiative. However, not everyone shares this view.
Purple Group CEO Charles Savage, who runs EasyEquities, said Clarity offers no share ownership, has different tax treatment on dividends and profits, and does not afford voting rights.
Savage argued that Clarity is more for traders and is, therefore, nothing like EasyEquities which is aimed at traditional investors.
EasyEquities chief marketing officer Carel Nolte also weighed in on the issue, criticising News24 for its reporting on Investec’s Clarity.
He said trading on Clarity involves synthetic CFDs, which is nothing like EasyEquities as there is no share ownership, no voting rights, different tax treatment, and fewer products.
“Maybe News24 wants to do a fee comparison – or is research too much of an ask and bait-click journalism is now where they are at,” he said.
Rautenbach dismissed Savage and Nolte’s arguments, saying Clarity is not aimed at high-frequency and high-gearing traders. It is also marketed as an investment platform.
He said that although Clarity was launched as a trading platform with investing and trading capabilities locally and offshore, its links to Investec changed the picture.
“Because we are a bank, we have a different value we can place on the cash on the platform,” he explained.
Because of the banking value proposition, Clarity does not need the value of the high frequency traders to make the platform feasible.
“We have a business model where we need the savings clients and a smaller group of trading clients on the platform,” he said.
“If we look at the collective, we are very comfortable that the platform can be commercially viable without having to incentivise speculative or high-frequency trading.”
He said Clarity does not want to compete with high-gearing and FX trading platforms. Instead, it is aimed at a more general investing audience.
Rautenbach said when they open the platform to the public, they envisage many people from other banks to start their investing and wealth creation journey.
It is, therefore, a direct competitor to EasyEquities with a similar target audience and strategy to make investing easy.