It can be done cheaper! That is the message for consumers in the launch of a new bank and a unit trust trading site this week.
BoE Bank and Christo Wiese's Pepkor launched PEP Bank (see Cheaper banking a reality) and Old Mutual has launched FundsNet, an internet-based investment platform with 24-hour access to an extensive range of unit trust funds provided by leading South African asset managers, at the lowest fees in the market.
For the past few years the broader financial services industry has been fleecing its customers with higher costs and when there was nothing left to take, dumping them along the roadside.
Mainline banks have been pushing up costs, charging for everything in sight while providing deteriorating levels of service. Some have even forced thousands of customers out on the grounds that it costs too much to manage their small amounts of money.
So it has taken a smallish bank, which has an image of only dealing with rich and beautiful, to show that all the banking industry's claims about being unable to provide affordable banking to lower income groups are phoney.
The problem is that the banks and other financial services players have been concentrating on a very small section of upper income earners and the rich. Not only has banking become expensive, but investment products are also costing more.
The current rule seems to be to make investment products as complex as possible so those who sell them can charge as much as possible - wrap funds are a prime example.
And in order to sell these products financial services companies have been paying higher and higher commissions - again to the detriment of investors.
An interesting aspect of Old Mutual's FundsNet is that it is aimed at middle- to high-income earners and is effectively cutting out a layer of costs.
For some years, the name of the unit trust game has been to offer you, the client, a wider choice with cheaper switching facilities between funds (but not at a lower total cost). FundsNet will give you lower overall costs than investing directly in a unit trust fund and will also enable you to switch between funds.
The FundsNet site offers online help that will enable you to make sound decisions for yourself, but if you are in any doubt, you can request the help of a financial adviser, but you will obviously have to pay. The fee is negotiable.
Old Mutual should now provide a range of index unit trust funds, which are a cheaper investment and, judging by recent results, perform far better than the so-called expert active fund managers, who seem unable, on a consistent basis to out-perform benchmark indices!
When something simple and cheap comes along it is a breath of fresh air. Remember you are often served best by the simple rather than the complex.
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Some weeks ago I wrote that Personal Finance was doing something positive to encourage a higher level of professionalism among financial advisers ( Now the best advisers can win this title). Personal Finance in association with the respected Financial Planning Institute (FPI) and the financial planning company, Ipac, are offering financial planners a chance to prove themselves.
This opportunity is in the form of an annual competition to find the best financial planner in South Africa. The award is not based on how much business a financial planner does, but rather on the quality of the advice and service that a planner provides.
The objective is to improve advisers' level of service and ensure that you, as ordinary consumers of financial services, are better served by your financial planner.
The surprising part is that so far only one financial adviser has entered the competition.
I cannot believe that only one financial adviser in South Africa believes he or she is worthy of the position of the best in South Africa!
Personal Finance will publish full reports on why and how the winners made the mark so that you, as an investor, know what level of service you should expect.
Three groups of finalists will be chosen from each of Personal Finance's major circulation areas: Gauteng, Western Cape and KwaZulu/Natal.
Advisers living outside these areas may also enter and will compete in the nearest geographic area as decided by the organisers.
A winner will be selected for each region as well as an overall national winner. Personal Finance will profile all nine finalists.
And to encourage the finalists to strive for excellence, the prizes are designed to further their education.
The finalists will all be invited to the FPI's annual conference, while the overall winner will also get an economy class air ticket to an international Certified Financial Planners' conference of his or her choice.
Full details of the competition and the entry form are available on the websites of the three co-sponsors of the award: See the events section of this site; www.ipacsa.com; and www.fpi. co.za. Entry forms must be in by end of November.