By Ashleigh Brown, journalist, Justmoney
Through accessibility and easy-to-use interfaces, many traders have switched to online platforms. With EasyEquities soon to launch their main trading site, and Sanlam iTrade holding a competition to encourage more sign ups, many might be wondering about the safety of trading online.
Mabyanine Phiri, portfolio associate at ACM Gold, said that there are ways to ensure safe online trading. One such way is to select a reliable broker. “Research the company before you sign up and make sure they are FSB regulated. You need to trust your account manager and brokerage, and that they will have your best interests in mind. You need to make sure that they are easily contactable and can assist you with all your queries.”
(For more information on whether a broker is FSB regulated, click here.)
Online safety for trading follows the same rules as other online activities: never give out your password, do not use public Wi-Fi hotspots or shared computers at internet cafes as they offer minimum security. Stay informed about where your money is going, and how many transactions you have made.
When it comes to picking anonline trading platform, it is vital knowing that your money is safe and that transactions aren’t too expensive. There are a host of different online trading platformsto choose from in South Africa. Here’s a roundup of a few to consider:
(See below for a full table on all prices on products.)
FNB
First National Bank (FNB) has three products when it comes to online trading: the Share Saver, Share Builder and Share Investor. “We try to cater as many people as possible,” says Carin Meyer, CEO of FNB Share Investing.
Share Saver is an online product where you pay a monthly fee depending on your portfolio size, however, a minimum monthly investment of R300 has to be made. This product does not allow you to pick your own shares, but rather have your money invested for you across the top 100 companies on the JSE.
(For more information on Share Saver fees, click here.)
With the Share Builder, the number of shares you can buy into is limited, but you can choose which shares you want to invest in and you can buy Krugerrands. “We limit the number of shares so that the clients do not feel overwhelmed by too much information, but still have the freedom to choose which shares they want to invest in,” says Meyer.
You have to have a minimum account balance of R100, and pay a monthly fee of R19.
(For more information on Share Builder fees, click here.)
The Share Investor allows you to look at all the shares on the JSE: “this is for those guys who are comfortable,” says Meyer. This has a monthly fee of R49, with a minimum account balance of R200.
PSG
PSG offers online trading as well as various educational products to help with first time traders. Shaun van der Berg, head of client education at PSG, says: “The PSG Wealth online trading and investment platform is built on a secure site. When engaging with clients we verify their identities in order to ensure that we are dealing with the correct person.”
PSG has a wide range of online videos, and tutorials to help traders better understand the market: “[the clients] first investment is in their stock market education. Read the online tutorials to gain the basic theory but also use the trading simulator to understand how to place orders but more importantly, to gain confidence in their stock-picking abilities,” says van der Berg.
There are a broad range of options including equities, derivative products and exchange traded products, as well as unit trusts. “Traders have the facility to trade derivatives such as single stock futures, index futures, currency futures and contracts for difference. For the more advanced investor, they offer the facility to trade all major international markets, 23 of which can be accessed with direct market access,” said van der Berg.
There are three main accounts with PSG: the Online Investor, Online Live Trader, and Online Technical Trader (see table below for full prices).
PSG’s exchange traded product (ETFs and ETNs) investment plan account requires a minimum monthly debit order of R300 or a lump sum of R1 000. Their unit trust products require a minimum monthly debit order of R500 or a lump sum of R20 000. For CFDs, a minimum exposure value of R25 000 (requiring R3,750 margin for Top40; and R4,375 margin for top41-100 stocks) is required.
For more information on PSG fees, click here.
Standard Bank
For many people looking to trade online security is a concern. Brenden Bissett, senior business manager for Standard Online Trading at SBG Securities highlighted the firms focus on this with both internal and external measures employed.
Standard Online Trading has various online trading options depending on the level of a traders expertise and understanding of the market. Opening an Automatic Share Investment (ASI) account is an inexpensive way for clients to get started. You can schedule automatic payments every month and ASI then provides a pre-selected list of JSE shares for you to choose from. However, as it housed in Internet Banking you have to be a Standard Bank client in order to use this product.
For a full service offering you can open an account at Standard Online Share Trading (OST), which cost R60 a month and provides you with access to wide range of products. You do not need a Standard Bank bank account to become an OST client.
However, when it comes to advice, Standard Online Trading will not tell you which stocks to buy and which to leave, but rather will give educational courses and webinars (online seminars) as well as a range of tools including company history and research on the stocks you are interested in equipping you with the skills to make your own decisions.
For more information on Standard Bank prices and products, click here.
Absa
Absa has two options when it comes to online trading. Their online trading platform allows clients to trade shares and ETF’s, as well as check their accounts at any given time. The second service is a telephonic one where clients place trades through a simiple call and have the ability to monitor their stocks online.
Absa does not have a monthly account fee, but their “highly competitive brokerage rate is a mere 0.4% of the value of securities traded, though there is a minimum brokerage charge of R120 per trade,” according to their website.
Absa do not have educational information at the moment but Robert van Eyden, the head of stockbroking at Absa adds: “There will be a concerted effort on educating people about the shares.”
Product prices
|
|
Monthly fee |
Min. account balance |
Min. brokerage charge* |
|
FNB |
|
|
|
|
Share Saver |
- |
R 300 |
R 40 |
|
Share Builder |
R 19 |
R 100 |
R 50 |
|
Share Investor |
R 49 |
R 200 |
R 50 |
|
|
|
|
|
|
PSG |
|
|
|
|
Online investor |
R 40 |
- |
R 98 |
|
Online Live trader |
R 99 |
- |
R 98 |
|
Online Technical trader |
R 169 |
- |
R 98 |
|
|
|
|
|
|
Standard Bank |
|
|
|
|
Share Investor |
- |
|
R 60 |
|
Share Trading |
R 60 |
|
R 60 |
|
|
|
|
|
|
Absa |
- |
- |
R 120 |
|
Source: FNB, Absa, Standard Bank, PSG, prices correct as of 16 September 2014.
|
|||
For a complete brokerage lists, please follow the link of the relevant online trader in the article.
After you have found the best online trading service for you, and have signed up, make sure that you keep your password safe and have a secure network where you can trade on. Keep an eye on your transaction lists so that you know exactly where your money is going.