10X Investments has announced that it will be reducing the fees on new investment policies to zero for most of the year.
In a statement released on Wednesday (2 January), the asset manager said clients who started a new retirement policy in the month of January would start paying 10X’s fees only in October.
Using the monthly returns in the 2017 Alexander Forbes Large Manager Watch (LMW) as a reference, the 10X fund’s annualised return of 11.3% over the decade is 0.8% above the large fund manager average before fees.
“We’ve consistently beaten the country’s large manager average. When you factor in the average 2% in fees that we save our clients those returns look even better,” said Chris Eddy, head of Investments at 10X.
“The difference compounded over a 40-year saving period really is the difference between a dignified retirement and a dismal one.”
Eddy said that it is important to focus on those aspects of your retirement plan that you have control over.
He recommends that retirement savers diligently contribute 15% of their salary on a monthly basis, invest in a portfolio that is appropriate for their time horizon (which for most retirement savers would be a high equity portfolio), and keep fees as low as possible.
“In an environment of heightened uncertainty, no one can realistically predict what the market will return over the next year,” he said.
“The only thing that is guaranteed with any certainty is the fees that you pay.”
The company’s fee-free promotion applies to new retirement annuities, living annuities and preservation funds and is open to all individual investors.
The asset manager signed a total of R300 million of new business during its fee-free promotion last January, which means a potential saving of almost R3 million in fees for clients, it said.