South African low-cost investment platform battle

Investec officially launched its Clarity investment platform, taking on EasyEquities by offering low-cost investing to South Africans.

On Wednesday, 12 February 2025, Investec opened its Clarity platform to the public, offering self-managed, tech-driven investing to South Africans.

Clarity promises to unlock a “new era of self-managed, tech-driven investing for local investors eager to take control of their financial futures”.

It provides clients access to over 750 instruments listed on local and offshore markets, where users can trade on a leveraged or non-leveraged basis.

Trading takes place via contract-for-different (CFD) instruments. Clarity promises transparent, competitive pricing with zero admin, platform fees or broker commissions.

Therefore, every time you trade, Clarity’s fee is automatically priced into the spread of up to 0.2%.

The spread is the difference between the sell and buy price at which the transaction is executed.

If you trade on margin, Clarity also has margin rates. The platform charges up to 50 basis points on the forex spot rate when converting currencies between ZAR and USD.

Clarity business head Tinus Rautenbach said the pandemic in 2020 caused an evolution in the trading landscape.

Investec’s new online trading platform aims to offer its clients what they want and make it easy to trade local and international instruments.

One of these is to make it is to convert rands to foreign currency like US dollars instantly. “The average time for clients to execute a forex trade is just 25 seconds,” Rautenbach said.

There are no minimum investment requirements, and clients can trade through the Clarity website or the Clarity app.

As a low-cost investment platform, Clarity competes directly against Purple Group’s EasyEquities platform.

EasyEquities has a ten-year head start and enjoyed partnerships with large companies, including Telkom, Capitec, and Discovery Bank.

These partnerships give it access to a large number of South Africans, and over one million clients already use the platform.

EasyEquities versus Investec Clarity

With EasyEquities and Clarity targeting the same clients, it raises the question of the difference between the two platforms.

The main difference in revenue generation between Clarity and EasyEquities is that Clarity charges a spread fee, while EasyEquities charges a brokerage commission.

A spread fee increases the bid and asks spreads of shares, meaning a trader will pay a slightly higher price and sell the security at a somewhat lower price.

The increase in spread represents the fee that Clarity makes and what clients pay, and it is capped at 0.20%.  

EasyEquities executes its trades at the quoted bid–ask spread but charges a trading commission on the total trade value.

Clarity has no platform fees or other fees, EasyEquities has a ‘Thrive fee’ of R25 per month, which is widely seen as a platform fee.

However, EasyEquities users can do certain things to reach a Thrive level to avoid paying this R25 monthly fee.

A big difference between Clarity and EasyEquities is that Clarity only offers exposure to shares through CFDs (contract for difference).

The holder of a CFD does not directly own the share and therefore has no voting rights on the share.

A CFD holder enters into an agreement with the broker, in this case, Clarity, to pay the difference in the share price of the underlying stock until the trader decides to close the position.

Without any leverage, the holder of a CFD, therefore, generates the same return as a direct owner of the stock.

A CFD contract is also customisable because the trader can borrow funds from the broker, Clarity, to partially fund its exposure.

A CFD also allows the trader to take short positions on the stock, causing the trader to profit from shares losing value.  

EasyEquities, on the other hand, offers direct ownership of the shares purchased on the platform. It offers users fractional share rights.

The fractional shares are CFD contracts with EasyEquities, with EasyEquities paying the holder the difference in share price. The fractional shares do not hold any voting rights.

However, once a user holds enough fractional shares to make up a whole share, EasyEquities closes out the CFD contracts and transfers a whole share to the user.

This gives the user complete ownership of the share and all the voting rights linked to it.  

EasyEquities versus Investec Clarity fees