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General Category => Shares => Topic started by: MrNC on April 18, 2016, 08:32:37 pm

Title: TFSA Providers
Post by: MrNC on April 18, 2016, 08:32:37 pm
Hi,

I'm sure this is something that's been frequently debated (and I've read some of the discussions in the other relevant topics), but I'd just like another opinion now that TFSAs have been around for a while.

I'm trying to choose between the tax free savings account providers that allow DIY investing (eg. in the full range of ETFs allowable in such an account). There seem to be 3 (ABSA stockbrokers, Standard Bank and Easy Equities), and from what I can tell, in terms of fees:

-Brokerage: Both SB and EE charge 0.25% brokerage while ABSA charges 0.2%;
-Admin fee:
SB (using Online Share Trading) would charge R80 per month for account maintennance;
SB (using the Internet Banking Portal) has a R10 account fee, I suppose in addition to the fee on the relevant current account you need to have with them in order to qualify for internet banking
EE levies a Settlement and Administration fee of 0.075% of the value traded; while
ABSA has no extra admin fees, from what I can tell.

Based on these points, ABSA seems the cheapest option (if I'm not missing something).
Are there any additional considerations (eg. long term security of each provider etc.) that I should bear in mind. To me, ABSA seems a stable provider (at least as stable as any South African bank) and I know some people have mentioned troubles doing large purchases with EE (eg. needing to phone them up to complete a purchase, or something, for liquidity issues) - but I really don't have much experience in such matters. I'm just looking for guidance on a cost effective, secure and sustainable option.

Thanks  :)
Title: Re: TFSA Providers
Post by: Hamster on April 18, 2016, 11:12:53 pm
There are many more providers than those three.

I make use of both EE and ABSA (and work on STD Bank OST).

There is a certain amount you need to invest for ABSA to be the cheapest, but it is marginal.

EE allows you to invest more (less left over cash) because of fractional shares.

You are the owner of the ETF shares so the security of the broker's future is a moot point really.

Go with ABSA.

Sent from my MotoG3 using Tapatalk

Title: Re: TFSA Providers
Post by: Patrick on April 19, 2016, 07:46:29 am
I, like Hamster also use both. Last year I opened an Easy Equities account, and this year and ABSA account. I also tried to open an ABSA account for my sone this year, but their service was just too terrible and I couldn't get it done in time, so I opened an EE account for him too.

Then to check prices, I did trades on my sons EE TFSA and my ABSA TFSA at the same time buying DIVTRX. On both I received the ABSA live buy price of 2785. Looking at the trade volume that day, I was the only buyer, and no trades executed at any other price but R27.85. To compare costs, I received the following:
EE 179.5332 shares at R5018.54 = R27.95 per share
ABSA 179 shares at R5001.26 = R27.94 per share

So for me everything seems to be in order. ABSA is cheaper as I would imagine giving their 0.05% fee advantage, but by such a small amount it probably won't matter in the long term. Also I got more shares with EE, so their growth would probably cancel out the ABSA price advantage in the long term.

Once they set the legislation allowing you to move providers, I'll probably move everything to Easy Equities due to their vastly, incredibly, enormously better customer service. ABSA basically never responds to my emails, while EE does so promptly and efficiently, often calling me soon after to make sure I'm happy the outcome. Hard to believe that's the case considering I have a few bar with ABSA and only R30k in EE!

I'd move my private investing account to EE too, but the fact that ABSAs ETF only account is 0.05% cheaper makes sense for me right now with the larger amounts I invest in it.
Title: Re: TFSA Providers
Post by: Hamster on April 19, 2016, 08:24:43 am
My two big issues with EE:
 - how long will they be able to sustain their cheap pricing
 - the site looks like Candy Crush Saga and those little blocks don't give me the overviews I want. I need a damn table on that site :(
Title: Re: TFSA Providers
Post by: Patrick on April 19, 2016, 09:05:17 am
My two big issues with EE:
 - how long will they be able to sustain their cheap pricing
 - the site looks like Candy Crush Saga and those little blocks don't give me the overviews I want. I need a damn table on that site :(
Haha yeah it does look like a game. That's actually one of the reason I recommend it to people new to the market. Have you ever tried to explain how ABSA stockbrokers/FNB etc work to an older family member or colleague?

I'd like it to have live pricing though. If they up their rates, I'll just move.
Title: Re: TFSA Providers
Post by: gcr on April 19, 2016, 10:04:38 am
My two big issues with EE:
 - how long will they be able to sustain their cheap pricing
 - the site looks like Candy Crush Saga and those little blocks don't give me the overviews I want. I need a damn table on that site :(
Haha yeah it does look like a game. That's actually one of the reason I recommend it to people new to the market. Have you ever tried to explain how ABSA stockbrokers/FNB etc work to an older family member or colleague?

I'd like it to have live pricing though. If they up their rates, I'll just move.

Patrick - why aren't you getting live pricing. Maybe you should ask what the criteria are for you to qualify for live pricing, also raise the question around how many transaction a month are required to ensure you have no monthly "holding costs" for keeping your scrip with your broker. It seems that companies work on the principle today that unless you ask for the cheapest rates they won't bother to notify you.
So as Nike says - Just do it
Title: Re: TFSA Providers
Post by: Hamster on April 19, 2016, 10:20:56 am
My two big issues with EE:
 - how long will they be able to sustain their cheap pricing
 - the site looks like Candy Crush Saga and those little blocks don't give me the overviews I want. I need a damn table on that site :(
Haha yeah it does look like a game. That's actually one of the reason I recommend it to people new to the market. Have you ever tried to explain how ABSA stockbrokers/FNB etc work to an older family member or colleague?

I'd like it to have live pricing though. If they up their rates, I'll just move.

Live pricing will cost you, that's the JSE way. With EE aimed at being cheap and easy to use I doubt you'll ever see it unless they subsidise it.
Title: Re: TFSA Providers
Post by: Patrick on April 19, 2016, 10:30:07 am
Live pricing will cost you, that's the JSE way. With EE aimed at being cheap and easy to use I doubt you'll ever see it unless they subsidise it.

There is a loophole though, just keep a (possibly empty) TFSA with ABSA. No charges per month, and they give you live pricing  :TU:
Title: Re: TFSA Providers
Post by: Hamster on April 19, 2016, 12:12:39 pm
Live pricing will cost you, that's the JSE way. With EE aimed at being cheap and easy to use I doubt you'll ever see it unless they subsidise it.

There is a loophole though, just keep a (possibly empty) TFSA with ABSA. No charges per month, and they give you live pricing  :TU:

...or just check the database here at the bank :whistle:

I've never really needed live pricing though :)
Title: Re: TFSA Providers
Post by: MoneyChief on April 19, 2016, 01:17:29 pm
I have been trying to open an ABSA account for over a month now with no luck. They keep on having to fix something on their end, and every time I have to wait 24 hours before I can try again.
Title: Re: TFSA Providers
Post by: MrNC on April 19, 2016, 08:03:38 pm
I have been trying to open an ABSA account for over a month now with no luck. They keep on having to fix something on their end, and every time I have to wait 24 hours before I can try again.

This was unfortunately also my experience - it took just over a month for me to open an account with ABSA. I also hear people's comments that their service may be worse, but when there is a concrete fee advantage (even if it is very small), I find it difficult to pass that up.
Title: Re: TFSA Providers
Post by: Hamster on April 20, 2016, 05:34:12 am
Well I'll be the exception. I opened a demo account with ABSA and once done upgraded it to a new account. Sent documentation and heard nothing from them for two days. Then phoned, they checked and told me what was wrong. Long story short: took me about a week

Once open there was some password issues. Phoned and very helpful.

All in all, EE is better at support (because new?) but once you have the ABSA accounts open it's worth it.

Sent from my MotoG3 using Tapatalk

Title: Re: TFSA Providers
Post by: rjthomas on May 17, 2016, 03:47:36 am
Thanks for your input. This is a worth while discussion.

I decided to stick with EE because I only have a Capitec Bank account. Its too much of a hassle to a new bank account with one of the big four.
Title: Re: TFSA Providers
Post by: gcr on May 17, 2016, 09:37:57 am
Not sure how many on this forum have their own private portfolios with a broker firm, but I would imagine quite a few.
I got my brokers to open up another account specifically for TFSA - which they did with minimal paper work as the original documentation sits with them for my primary account.
The second account is styled a TFSA account and as such draws all the statutory minimum charges when making buy orders, but, there are no broker admin charges channeled to this account.

So for those who are looking to going in to TFSA's and have a broker account discuss with the broker the best way to run a TFSA account which will incur no admin charges (statutory charges are unavoidable), it saves on the hassle of FICA and other unpalatable legislation requirements.
Title: Re: TFSA Providers
Post by: jonb on May 17, 2016, 11:32:42 am
Been trying to open ABSA account from out here in Amsterdam and a total nightmare! mainly Fica and having to certify originals which is really hard out here

EE always been great for me ... a few teething issues when buying larger purchases and needing to call in but for TFSA and single stocks works for me

is that 0.05% the only price difference between the two ??? can anyone 100% conform that ? Im with Patrick on the fact that the fractal ownership will make up for that

On another note ... has anyone used their TFSA to trade ETF's ? I have two full years ready to go and super interested in trying this
Title: Re: TFSA Providers
Post by: Hamster on May 17, 2016, 12:10:15 pm
On another note ... has anyone used their TFSA to trade ETF's ? I have two full years ready to go and super interested in trying this

If by "trading" you mean "did I sell an ETF I thought was under performing a year ago and still not made up the losses", then yes  :wall:
Title: Re: TFSA Providers
Post by: jonb on May 17, 2016, 12:49:40 pm
@Hamster

been there done that ... which ETF if you don't mind me asking?

For trading I meant, actual charting of ETFS and buying and selling when appropriate .. the outcome being all profits made are tax free ?
Title: Re: TFSA Providers
Post by: Hamster on May 17, 2016, 01:59:13 pm
@Hamster

been there done that ... which ETF if you don't mind me asking?

For trading I meant, actual charting of ETFS and buying and selling when appropriate .. the outcome being all profits made are tax free ?

I bought R10k DIVTRX in May of last year, right on the high. Went downhill from there. Eventually decided to cut my losses and like an idiot I sold it when it was worth +- R7800.... a year later I have R20k worth of DIVTRX in the same account with STXIND and DBXWD absorbing that loss/costs  :-[

And just when you think I've learnt my "never sell" lesson I go and do the same thing in the Investor Challenge  :wtf:  :whistle:
Title: Re: TFSA Providers
Post by: jonb on May 17, 2016, 03:31:10 pm
never sell

that's a hard lesson to stick by!!!!!!!!!!!!!!!
Title: Re: TFSA Providers
Post by: Hamster on May 17, 2016, 07:49:07 pm
never sell

that's a hard lesson to stick by!!!!!!!!!!!!!!!
Indeed
Title: Re: TFSA Providers
Post by: Mr_Dividend on July 28, 2016, 08:24:41 am
BTW - I have changed my TFSA "strategy" (I use the term loosely!). Previously, I liked the idea of having decent SA dividend paying ETF's in it to get the div tax savings. So no foreign ETF's. Did poorly and actually only grew by the dividend - which I reinvested

My thinking now is go for maximum growth and to hell with the dividend UNTIL you need to draw from it and then decide what strategy works best.

looked at DBWD and DBUS - went with DBUS as DBUS has out performed DBWD on every time scale so far. And although past performance blah blah blah, to my mind, it's still more concrete than future hypotheses.



Title: Re: TFSA Providers
Post by: Hamster on July 28, 2016, 10:52:19 am
BTW - I have changed my TFSA "strategy" (I use the term loosely!). Previously, I liked the idea of having decent SA dividend paying ETF's in it to get the div tax savings. So no foreign ETF's. Did poorly and actually only grew by the dividend - which I reinvested

My thinking now is go for maximum growth and to hell with the dividend UNTIL you need to draw from it and then decide what strategy works best.

looked at DBWD and DBUS - went with DBUS as DBUS has out performed DBWD on every time scale so far. And although past performance blah blah blah, to my mind, it's still more concrete than future hypotheses.

DBXUS costs more than DBXWD. Not worth it imo. I have DBXWD, STXIND and DIVTRX in mine (evenly split) and DIVTRX is outperforming them so far. Reckon I'll split future contributions evenly between DIVTRX and DBXWD.

EDIT: I see STXIND is also doing very well, both it and DIVTRX leaving DBXWD behind so far.
Title: Re: TFSA Providers
Post by: Mr_Dividend on July 28, 2016, 11:24:56 am
between DBXUS, DBXWD, STXIND and DIVTRX (only can compare it for a year)

DBXUS win 1 and 5 years
STXINDI win 10 years
and STXDIV wins YTD

All have good points.