There are so many great investment companies in South Africa that give you as the investor the hard choice of where to put your hard-earned cash. As South Africans, we are lucky to have a very strict and stringently enforced financial system that helps us avoid scams. To get your Financial Services Provider License, a company has to go through a series of exams and licensing to ensure they are fit and proper. This helps regulate the providers.
This is why it is important to check that the company you are looking at is registered and has a valid FSP number.
But which company is the best?
Unfortunately, we cannot say one company is the best as they all have their pros and are suited to different investors. We would rather let you figure out for yourself which is best for your needs.
Some companies have great fees, other great results and some are very exclusive. It all depends on your wants, needs and expectations.
Here are three questions to ask yourself when choosing an investment company in South Africa:
- What funds do they offer – high-risk funds are designed to create wealth and returns over the long term. This means 5+ years. While money market funds are stable funds for short term investments. So, knowing which funds a company offers and matching them up with your needs is a vital part of choosing an investment company. If you need help doing this, speak to a financial advisor.
- What are their fees – fees can seem like small amounts but can add up over time. The industry standard is management fees of between 1-2%, according to our research. However, this can vary and will differ depending on the products and offerings for the fund/ company. Make sure to check the fees.
- What is their past performance – while past performance is no indicator of future performance, it can show the portfolio managers ability when comparing the fund to its benchmark. Is it doing better or worse than its benchmark over the 5 year period? This can help you ascertain if the manager has a good record or not.
Choosing an investment company is hard and requires some time to do research. But this research is vital to ensure you get the best possible results with your investments. To make this process easier, we always recommend speaking to a registered financial advisor who can assist you in making an informed decision.