Cape Town - Consumers and advisers will for the first time be able to compare charges and their impact on investment returns across most savings and investment products from October this year.
All members of the Association for Savings and Investment South Africa (Asisa) are required to adopt the new Asisa Standard on Effective Annual Cost (EAC) from June 1 2016. The first phase, which applies to all new investment applications, must be implemented by October 1 2016.
Asisa represents the majority of South Africa’s asset managers, collective investment scheme management companies, linked investment service providers (LISPs), multi-managers, and life insurance companies. The EAC Standard will apply to the majority of products offered by these companies.
According to Michael Summerton, convenor of the Asisa EAC Working Group, the Standard is most likely a world first in its comparative scope and cost transparency. Summerton emphasised that the EAC Standard facilitates cost comparison only, and does not provide any insights into the differences in product features.