Hi Guys, This is slightly of topic but would appreciate any guidance you can offer. When i started work in 2008, i was approached by a financial advisor to take out an RA. Still young and naive i took out a policy only knowing it would cost R500 a month and increase every year by 10% and be invested in an aggressive portfolio- That was the only things discussed. The policy is from Sanlam - Cobalt for professionals. Recently i started receiving quarterly statements from Sanlam with my contributions and the charges. in a quarter my RA contributions are around R3000. In addition to a plan charge of R38, i pay R880(vat inc) for a variable administration charge. This amount is calculated by taking the current fund amount *3.4% / 12 * 3(3 months for the quarter). So my contribution to the RA is actually 2200. My question - Is this normal? Any advice? Should i cancel? What are my options? My concern is when the fund grows to 2 or 3 mil and i will be paying fees on that.Feel like i was screwed over. Thanks in Advance!
I was in the business for a while until I got out 19 years ago so I am out of date .what u do not say is whether you were given a quote and were the charges explained to you-current legislation insists that this is done-even 8 years ago u should have been provided with a breakdown.the charge of around 800 rand on a 3000 contribution sounds way out?are you sure there is not some insurance cover-life?disability?surrending the policy is not normally a good idea although you could always ask for a quote-u will probably be horrified.you can always try to renegotiate especially if sales guy did not explain upfront.you can always refer matter to omsbudsmen if you feel you have been misled but you need to have a case to stand a chance of winning.I hope you come right -by the way the idea to invest now for your future was the correct one and it sounds like you are trying to do the right thing-u should investigate the tax free saving options that government allows -its a no brainer if you have 20 years to go before you retire in my opinion-no good for an old so and so like me though.wish they had been around for me.
Dear MOVE " 1. The charging structure relates to "old generation products. If you find yourself an adviser who can determine that for you - so much the better. You should be able to consider a move to a new generation product. That will cost you an advice fee( which you and the planner negotiate!!) , an asset /portfolio management fee( 1.6% or so ) and not much else - 2 % of your contribution?? 2. if the contribution increases each , each year an adviser will be getting commission based on the term to run - probably to age 55. Crazy - but only crazy if you are NOT getting advice from them. 3, Don't buy a product get a plan - you would be best advised to consult with a Certified Financial Planner - who charges fees NOT COMMISSION. YOU CAN FIND ONE ON THE Financial Planning Institute site : go to www.fpi.co.za and under the drop down "your financial Planning " you will be able to look for a qualified financial planner. Geordie is right - do not drop anything until you see what it costs you!