Do-it-yourself unit trust platform launched

For no upfront fee and a relatively low annual fee, you can invest in a range of unit trusts that meet your needs through www.investonline.co.za.

As consumers become more concerned with the high costs of investment products, we will see further online innovation that will cut costs for those simple investments that do not require financial planning.

This new website, created by Nick Brummer and Rod Lowe, both who have extensive experience in the industry, helps you to make your own investment decisions by filling in a risk-related questionnaire and then recommending a portfolio of unit trusts.

The questionnaire includes questions about your age, the length of the investment, your other investments, your return expectations and your emotional response to risk. This is pretty much what a financial adviser would be asking and the questionnaire takes about 10 minutes. You can then invest directly through the site. The minimum debit order is R2 000 per month and R20 000 lump sum.

The annual fee charged by the site is 0,57% and about 0,1% goes to Allan Gray, which hosts the administrative platform. Then there are still the underlying unit trust costs, which vary depending on which fund you are invested in.

This is a good solution if you want a portfolio of unit trusts spread across various asset classes such as bonds, cash, property and shares. A unit trust house that is good at selecting shares may not be quite so strong at fixed interest for example. By investing across a range of unit trust houses one can select the “best of breed”.