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The Financial Wellness Coach: How to successfully find your way through the investment maze

Kenny Meiring
By Kenny Meiring
21 Jul 2021
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Question: I want to start investing but have heard horror stories about high fees, hidden costs and poor returns. How do I go about investing without making these mistakes?

First published in the Daily Maverick 168 weekly newspaper.

Answer: When you make an investment, there are three things you need to look at:


  • Costs;

  • Potential returns; and

  • Taxes.


If you just consider one of these elements, you can end up with an inefficient investment.

Platform costs

You can buy unit trusts directly from the unit trust company or you can buy them through a platform that has access to a multitude of unit trusts and other investments. In the second instance, although you will be getting the flexibility of having access to other unit trusts, you will be paying a platform fee. Granted, this platform fee is often low, but it is an additional cost.  

This additional cost needn’t be a showstopper. The platform cost is subsidised by “wholesale pricing” on the investments by investing through a platform. This means that you can get access to the investment at a lower base cost by going through a platform than by investing directly.

So if you want to invest in one or two unit trusts, it probably makes sense to go directly.  If you want to have more choice and flexibility, then look at going through a platform.

Advice costs

This is a contentious issue.

If you have a proper financial planner who helps you structure your investments properly, then this is not a cost – it is an investment.  A proper financial planner would look at your short-, medium- and long-term financial needs and make sure that you use the right investment vehicles to get the best possible returns and pay the least amount of taxes. The advisor would regularly review your portfolio and make the necessary adjustments to ensure that you get the end result.

On the other hand, you have insurance agents who will sell you an investment policy that will give them a nice upfront commission and then they pretty much disappear. Here the advice is not an investment – it is a cost.  It is no wonder that so many people are electing to do it themselves.  

Doing it yourself does come with risks. If you are inexperienced, you will focus on those easily visible elements like costs. The appropriateness of the investment portfolio for the prevailing market conditions are often ignored, as are tax structures.

The appropriate portfolio

In my practice I frequently come across many people who have low-cost investments that have not performed.  These investments are also often inefficiently structured, so unnecessary tax will be paid when the investment matures.

Tracker funds are cheaper than actively managed ones. There will be times when it makes absolute sense to use low-cost tracker funds. For example, in the five years leading up to last year’s market collapse, most actively managed funds did not produce the additional returns that warranted using them instead of those that tracked the market or a particular sector.  

Following the worldwide lockdowns, many active managers have come into their own and have produced returns that more than justified their fees.  

If you also invested in low-cost funds only, you would have missed out on some of this growth.

Tax structures

In an earlier article (DM168, 2 June 2021), I wrote about the importance of using wrappers to save on tax.

The same unit trust investment, for example, can produce very different after-tax results, depending on what wrapper you use.  

When you invest, you must know what you are trying to achieve and if a wrapper will give you a better result in terms of:

  • Paying lower tax;

  • Not paying capital gains tax on currency movements;

  • Not paying estate duty;

  • Reducing your overall tax bill; and

  • Not paying executor fees.


If you are going to do it yourself, you need to:

  • Understand the actual investment costs;

  • Make sure your investments are appropriate for prevailing and future market conditions (even if they are more expensive); and

  • Ensure you use the right structure.

  • If you feel you do not know enough to make the right calls here, you should find a decent financial planner to assist you. It is worth making the effort to get it right – the costs of getting it wrong can be large.  


See if you can find someone who charges an advice fee, because this shows they are focused on providing the correct advice rather than selling a particular solution. If you cannot find one of these, look for a certified financial planner. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for free to Pick n Pay Smart Shoppers at these Pick n Pay stores until 24 July 2021. From 31 July 2021, DM168 will be available for R25 at Pick n Pay, Exclusive Books and airport bookstores.

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