Low-cost, low-entry barrier stockbroker EasyEquities is trying to democratise financial services in South Africa. Including retirement funding, a space dominated by massive institutions whose cost base makes it expensive for retail investors to participate. Easy’s subsidiary RISE (Retirement Investment and Savings for Everyone) has been building a presence through offering ultra-low-costs and market-leading transparency – and in this interview, chief investment officer Duane Gilbert explains how it works and why Easy’s young client base (average: early 30s) is joining in growing numbers. He spoke to Alec Hogg of BizNews.
Duane Gilbert on RISE
Retirement investments and savings for everyone is the retirement savings division of EasyEquities. Most of your listeners will know that Easyequities is a retail trading platform. RISE is the division of the business where we manage retirement savings. So, as an employer or as a decision maker in your firm, you can approach RISE through our website and join our umbrella fund and bring your retirement savings across to RISE.
How RISE appeals to young people
We don’t have any subsidised retirement in this country in a meaningful way. Young people are waking up to the fact that when you retire, you are responsible for your own finances. A lot of people have parents who have reached retirement age and realised that the burden falls on them, and they don’t want to do the same for their kids as well. You might think that there isn’t a strong savings culture in the 20 to 30-year-old demographic, but it is quite strong.
Inheritance and wealth inequality
You will find that most working people my age tend to have, not only their parents to take care of, but a lot of them have unemployed or uneducated siblings who are either not earning a salary or earning a very small salary. Then on top of that, it’s generally the burden of not having any family wealth to fall back on. So, you have to build that wealth for yourself and your kids, but at the same time, taking care of your parents and taking care of your siblings.
Tax incentives in the retirement space
Any contribution you make to your retirement savings is made on your pre-tax salary. So, there’s effectively a tax saving on your contributions. It’s not necessarily that you pay no tax, but the tax is deferred on your contributions until you retire and withdraw the savings. If anybody is familiar with the time value of money, the further out you can push your tax burden, the better off you are.
How to be part of RISE
You could connect with us through our website www.rise.co.za. Effectively, for larger employers, we could have a standalone solution, but for a smaller employer, such as yourself, you could join the umbrella fund – the Easy umbrella retirement fund – that will allow you to be part of a larger pool and effectively your employees will contribute to their retirement savings, we’ll manage those investments on their behalf. What I find to be appealing about RISE and why we are so well aligned with the rest of the group, is the idea of bringing full transparency to the user. Anybody I speak to who uses the EasyEquities platform, what they love about it is they can get onto the website, and they can see their balances, they can see how their stocks are moving, etc.. And it’s the same concept with RISE. You can see your investments. We are one of the lowest cost providers out there. We have lower investment minimums than most of our competitors. So, it’s really about improving accessibility and transparency, not to mention, obviously, performance is cyclical, but at the moment, we are a top-performing multi-manager.
