TL;DR

A 1.5% annual investment fee on a R500,000 portfolio costs R7,500 every year. Assuming a 10% annual gross return on a lump sum with no additional contributions, the lost growth over 20 years is approximately R808,000. On a R1 million portfolio, the same fee costs approximately R1.6 million in lost growth over 20 years. Research into South African retirement savers found that only 37% of those with a retirement plan could give a definitive answer on what they are paying in fees. The one move: find your fee percentage, multiply by your balance, write down the rand figure. Then ask whether what you are receiving is worth what you are paying.

Source: 10X Investments Retirement Reality Report 2023/2024, drawing on Brand Atlas survey data.

The answer nobody gave you upfront

1.5% is not a number that makes many people flinch. It sounds like a rounding error. It sounds like the cost of doing business. It sounds, to many South African investors who have never seen their fees translated into a rand figure, like nothing at all.

Research into South African retirement savers found that only 37% of those with a retirement plan could give a definitive answer on what they are paying in fees, meaning 63% cannot name what their investment is actually costing them.* Not because the information does not exist. Because the system was not designed to make it easy to find.

If you want to understand why the system works this way, read our piece on why percentage fees exist. This article shows you what it costs.

Source: 10X Investments Retirement Reality Report 2023/2024, drawing on Brand Atlas survey data.

How much does a 1.5% investment fee cost in rands?

Here is what a 1.5% annual fee looks like when you convert it to rands. The annual figures are straightforward, the percentage applied to the portfolio balance. The lost growth figures assume a 10% annual gross return on a lump sum with no additional contributions. They are illustrative, not guaranteed.

Annual cost in rands

These are the fees in year one. The real cost over time is higher because every rand paid in fees is a rand that is not compounding for you.

What the fee costs over time: approximate lost growth

Assumes 10% annual gross return on lump sum, no additional contributions. Illustrative only.

These numbers are larger than many people expect. They are the straightforward mathematical consequence of applying a percentage to a growing balance over time.

For a sense of scale at a different fee level: Retire Smart SA found that a 2% annual fee difference can cost an investor approximately R1.7 million over 20 years.

The numbers vary depending on the fee level and the assumptions used, but the direction is always the same. Fees compound against you over time in ways many people never see coming.

Source: Retire Smart SA, How Investment Fees Impact Retirement Wealth in South Africa, 2025.

What the numbers actually mean

R7,500 a year is not nothing. Put it in real terms:

• A return flight for two

• A month of groceries for a family

• A meaningful contribution to an emergency fund

• Three months of a child's school fees

And yet in our experience, investors often pay fees like this for years without ever seeing them written down that way.

The gap does not look dramatic in the early years. That is the point. The cost is invisible until it is not. By the time many people see the number it is already too late to recover it without significantly increasing their monthly contribution.

Fees do not just reduce your returns. They compound against you.

What is a reasonable investment fee in South Africa?

There is no single right answer but there are some useful things to look at.

For passive index funds, funds that track a market index algorithmically without a fund manager actively trading, fees are generally lower than actively managed funds. Past performance is not a reliable indicator of future results and individual outcomes will vary. 

For active funds, where a fund manager is making investment decisions, the fee is easier to justify when the fund outperforms its benchmark by more than the fee difference. It is worth checking performance against an independently published benchmark before making any investment decision.

For platform and adviser fees on top of fund fees, it is worth understanding what the combined annual total comes to in rands, and whether the value you receive matches it.

How to find your fee in rands

One question. Ask it of every investment product you hold.

"What did I pay in fees last year, in rands?"

If you cannot get that number from your statement in under five minutes here is how to find a rough version yourself. 

• Find the fee percentage. This will be in your policy document, platform disclosure or fund fact sheet. Look for TER (Total Expense Ratio), EAC (Effective Annual Cost) or annual platform fee.

• Multiply the percentage by your current balance. This gives you the approximate annual rand cost.

• Write it down. "I paid approximately R___ per year to ___."

You do not need to act on this today. You need to see it. Once you see the number you will know what to do next. If you cannot get a clear answer in one sentence from your provider, that is worth sitting with before you decide anything. 

The number was always there. You were just never shown it.

The financial system did not hide your fee. It disclosed it, in percentages, spread across multiple documents, with no rand equivalent shown alongside it, and no single place where the total was added up for you. 

That is not the same as transparency.

The 1.5% you have been paying is not small. On a R500,000 portfolio it is R7,500 a year. Over 20 years, assuming a 10% annual gross return, it is approximately R808,000 in lost growth. That is not a worst-case scenario. That is the maths.

You have seen the number now. The next step is yours.

Visit fynbos.money to see what a flat fee looks like.

A flat fee may cost more than a percentage fee for very small portfolios. See full pricing details.

Please note: Fynbos charges R100 per month as a platform fee on the Protea plan, reduced to R50 per month for investors under 30. A free Roots plan is also available. The platform fee does not include fund management fees, which are charged separately by the underlying fund. A flat fee may cost more than a percentage fee for very small portfolios.

Quick summary

What this is

A 1.5% annual investment fee expressed as a percentage because percentages feel smaller than rands. It compounds against your portfolio every year across platform, advice and fund costs.

What it costs

• On a R500,000 portfolio, 1.5% costs R7,500 per year

• Assuming 10% annual gross return on a lump sum, the lost growth over 20 years is approximately R808,000

• On a R1 million portfolio the lost growth over 20 years is approximately R1.6 million

• Retire Smart SA found that a 2% fee difference costs approximately R1.7 million over 20 years. Source: Retire Smart SA, How Investment Fees Impact Retirement Wealth in South Africa, 2025.

• Research found that only 37% of South Africans with a retirement plan could give a definitive answer on what they are paying in fees. Source: 10X Investments Retirement Reality Report 2023/2024, drawing on Brand Atlas survey data.

What to do next

Find your fee percentage. Multiply it by your current balance. Write down the rand figure. Ask whether what you are receiving is worth what you are paying in rands per year.

Figures assume a 10% annual gross return on a lump sum with no additional contributions. Illustrative only.

This article is for information purposes only and does not constitute financial advice. Fynbos Money is a licensed representative (FSP 51852).