Investing platform battle – EasyEquities vs Investec Clarity vs Standard Bank Shyft

EasyEquities is facing stiff competition in the retail investing market, with two of South Africa’s largest banks launching direct competitors. 

Standard Bank’s Shyft expanded its investing universe in March to include trading on the JSE alongside its global offering of equities in the United States, Europe, and the United Kingdom. 

Its expansion follows Investec’s opening of Clarity to the public in February, after it was previously only available to the bank’s private banking clients. 

This represents the first time that EasyEquities has faced direct competition from traditional incumbents in the retail investing space. 

The rising challenger has grown quickly, with its active client base nearing one million South Africans and close to R60 billion worth of assets invested on its platform. 

It also has an edge over Standard Bank and Investec’s offerings in that it enables users to invest in whole shares and fractional security rights (FSR). 

In comparison, Clarity only allows its users to access financial assets through contract-for-difference (CFD) instruments. 

Purple Group CEO Charles Savage has sharply criticised Clarity in the media, saying that its offering does not offer share ownership. 

Shyft only allows users to buy whole shares. However, it was said that fractional shares would be available to investors soon. 

Fractional shares are crucial, particularly for access to offshore investments, where purchasing a whole share may require over R4,000 in the case of a single stock share in Apple. 

Traditional banks have advantages of their own, with their tremendous scale and existing distribution channels being leveraged to enhance their offerings. 

This scale should enable them to offer lower trading fees and, in the case of Shyft, extremely low foreign exchange rates. 

These banks can also use the excess cash on the platform for traditional banking activities, reducing their reliance on trading income and enabling them to charge lower fees. 

They can also use the data collected from clients using the platform to target them with private banking offerings based on the funds users invest. 

Fee comparison

EasyEquities is popular with South Africans because of the low cost and barrier to entry on the platform, enabling everyone to invest in local and global equity markets. 

Crucially, it did not charge a platform fee and relied on revenue from trading fees to make money. 

This picture was clouded somewhat after EasyEquities introduced what is effectively a “platform fee” in the form of a mandatory Thrive subscription. 

In late 2023, EasyEquities announced that all users who do not reach level 3 of the Thrive loyalty programme will be charged R25 per month.

Clarity has gone all in on charging zero fees, with its platform having no monthly fee, no admin fees, and no commission. 

How it makes money is through the margin spread on trades, with its fee automatically priced into the spread (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.

There are no minimum investment requirements, and while average account sizes align with industry standards, some portfolios exceed R1 million.

However, it must be remembered that Clarity only offers CFDs and not full share ownership. 

Shyft, in contrast, does charge a safe custody fee of 0.12% plus VAT to hold an individual’s money within the trading wallet. 

It charges no other admin fees, with the rest of its revenue coming from trading fees and currency conversions. 

Shyft also earns money by charging fees for using its global cards to purchase goods internationally online or in person. 

The table below compares some of the main fees charged by the three platforms.