Franc app

Cool factor 4/5
Usability 4/5
Value for money 5/5

There’s a new investment app on the local market, and this one takes advantage of what is arguably SA’s favourite savings model: the stokvel.

Franc is available for iOS and Android users and was launched in time for Savings Month (July). Savings rates in SA are notoriously low. Franc says it wants to take the stokvel savings model into the 21st century – by giving people a mobile platform to invest on the same group-saving principles as a stokvel, but linking into formal investment products.

The app sets no minimum investment amount and will invest your money in a money-market fund and an exchange traded fund (ETF).

Other key factors that work in Franc’s favour are the lack of high fees and deductions. Your first six months on the app are free, and you can withdraw or transfer funds without penalty.

After six months, a flat R5 a month fee applies — but you can skip it by referring friends to the platform: for every friend you invite who becomes a member (during the first free six months), you’ll get a further six months’ free access.

There are investment management fees applicable to its funds but these are low and your returns are net of these.

The process is pretty simple. After the landing page, you arrive on a screen that asks you to set a savings goal and target date, define your monthly contribution, and choose a cash/equity split.

Pressing the little "i" icon next to the latter gives you a simple breakdown of this choice: "cash" goes into an Allan Gray Money Market Fund and equity into Satrix Top 40 (ETF).

It even provides returns percentage info, a link to "view performance" and a single-line explainer of the risk and return difference between these two.

If you are completely unfamiliar with these terms then conceivably you’ll want more. But by keeping the explanation tight and short, it comes off feeling more accessible. This, I believe, is a critical point. These investment vehicles can be intimidating to new investors.

But because you’re accessing this directly through the familiar interface of your mobile phone — and because it is presented so simply — it should go a long way to reducing this intimidation factor.