Most savers are getting a bad deal because of high fees and should question whether the retirement fund industry is acting in their best interests, says Stephen Nathan, CEO of 10X Investments.
"Fees have been shown to be the single biggest indicator of how you’re going to do as an investor," Nathan said in Johannesburg, where 10X revealed an ad campaign in Sandton’s Nelson Mandela Square on Wednesday, called #StopDaylightRobbery.
"Investors look at how the fund manager has performed, but no one knows what the fees are. [Fees are] the most important issue for people to focus on."
This was true for individuals and large retirement funds, Nathan said.
Fees charged on investment products are coming under increasing scrutiny by regulators and investors. As of October 1, members of the Association for Savings and Investment SA, (Asisa), have to disclose the effective annual cost for each category of fee charged on a financial product and for the financial product as a whole. This will make it easier for consumers and advisers to compare charges on retail investment products, as most life insurers and asset managers are Asisa members.
10X, which managed R7bn in assets, used index funds to save costs, achieving better investment returns than most active asset managers, Nathan said.
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