A Fin24 user writes:
I have a portfolio of shares with a stockbroker. The stockbroker charges a monthly fee (several hundred rands) for non-discretionary advice and support services which I do not believe I am receiving.
The equities are held in a "dematerialised" (electronic) nominee account. Is there some way that I can take over these equities and "warehouse" them in my own name, thereby reducing or eliminating my monthly expense for a service I am not receiving?
I tried asking my bank but was routed to a financial adviser who wanted me to sell the equities and put the money in a unit trust! Lunacy. Other ideas, please.
Jamey Lipschitz, regional manager - investment advisory services at Sanlam Private Investments responds:
As I am not entirely clear on the user's situation, I have made certain assumptions. He is also welcome to call me and discuss his specific requirements.
As a first step, I would suggest asking his stockbroker to explain what services he is paying for. Sanlam Private Investments charges an annual safe custody fee of R600 p a to operate a stockbroking account.
Generally non-discretionary stockbroking accounts do not have advice fees unless they are PCS (advisory service without full discretion).
In this case, the client is able to phone the stockbroker and discuss stocks, and the stockbroker should phone his client with investment ideas.
The dematerialised equities are placed in a nominee account to ensure separation of assets from the stockbroking firm's balance sheet, which protects the client.
Placing money in a unit trust does have certain tax advantages and there is the benefit of an investment manager making investment decisions; however, the investor would incur an annual management fee.
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