Guiding consumers since 2009

Liberty launches affordable unit trust platform

By Staff Writer
By Nicolette Dirk
 
Liberty, via its subsidiary, Liberty Linked Investments Platform (Pty) Ltd, has unveiled the Liberty GateWay Investment Plan that allows investors to invest in a range of leading unit trusts at a low cost.
 
“Anything else is confusing and makes it harder to understand the true costs of investing. With the GateWay, there is no admin charge when you set up your investment and the more clients invest the less they’all pay for ongoing admin,” said David Lloyd, managing director of Liberty Investments.
 
You can invest in the GateWay platform from R1 000 a month. And according to Lloyd it is faster because investors are able to invest with multiple unit trust providers rather than making the investment separately with each unit trust provider.
 
“GateWay was specifically designed with an understanding that, even for the savviest investor, life still happens. Which is why it includes a highly flexible monthly investment arrangement and allows investors to access all of their money at any time, penalty-free,” said Lloyd.
 
He added that Gate Way will afford all South African investors an entry point into the world of diversified unit trust investments. 
 
“With GateWay, regular South Africans and their advisers can now easily navigate the previously complex world of multiple unit trust investments and create an effective solution tailored to their unique goals, risk preferences and budgetary requirements,” said Lloyd.
 
How are the fees structured?
 
According to Lloyd you pay Liberty a percentage of what’s invested annually. 
 
“This starts at 0.57% and can be as low as 0.29%. The more that’s invested, the lower the platform charge will be,” said Lloyd.
 
This means that if, say, you had R1 000 001 invested, whereas most other platforms would only apply the lower platform charge to the extra rand, Liberty applies the lower platform charge to the entire R1 000 000 1. 
 
“You don’t pay a platform charge on investments in the money market. We believe that you should be able to take your time in choosing where to invest your money. Your investments in the money market still count towards reducing your platform charge,” said Lloyd.
 
Don’t be afraid to negotiate
 
Lloyd said you can negotiate what you pay your adviser. You can pay them an amount on day one of making the investment and/or you can pay them a percentage of what’s invested each year. Every year, you also pay your chosen investment managers.
 
“This is called a portfolio charge and is also a percentage of what’s invested. For some portfolios you may pay more than the portfolio charge – this is called a performance fee. Performance fees reward investment managers if ‘they beat the benchmark’ and penalise them if they don’t,” said Lloyd.
What makes this investment plan cheaper than the rest?
 
Lloyd claims you cannot get the unit trusts on this platform at a portfolio charge  cheaper anywhere else because GateWay has no rebates. 
 
“Some other platforms show a portfolio charge that starts at 2% a year. Then they give you a ‘rebate’ (or discount) of 0.5% a year so that you end up paying 1.5% a year. Even though you could have gotten it for, say, 1.2% a year, you think you’ve gotten a good deal,” said Lloyd.
 
He added it’s not transparent and it means you can miss out on some growth because you’re paying more than you should. “Some platforms don’t pass the full rebate onto customers – they keep it for themselves or give it to the adviser. The GateWay always shows customers the lowest-cost price of that portfolio,” said Lloyd.

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