A new cost measure on a sample of retirement annuities shows a wide disparity of charges - some that are above 4% a year over a longer term and others that are highly punitive over shorter terms. A new standardised method of disclosure adopted by investment companies that are members of the Association for Savings and Investment South Africa is lifting the lid on many charges. These include the effect on your savings of penalties for terminating your investment before the term is up, commission paid to an adviser instead of fees paid when you invest, loyalty bonuses, investment guarantees and other fixed-rand costs. In October the association introduced the "effective annual cost" measure, and all members committed themselves to disclosing this cost measure on quotes provided to new investors. The association revised its initial standard in June and many product providers have since made their costs more competitive. However, a sample of quotes drawn this week shows a wide disparity...
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