A computed illustration
How much you put away each month. How much you step that up each year. What it grows at, and what it costs you to hold. Move the sliders and watch forty years respond. No fund, platform or provider is named here, because that is not what this shows.
The period is fixed at 40 years. Time is the one input nobody gets to set.
Value after 40 years, after cost
R0
The lower band is your own money. Everything above it is growth.
The figure above and the chart use the cost you set. The growth rate you set is the gross return, before costs. Each row below takes a different annual cost off that same gross rate, so you can see the whole range on exactly the same contributions.
| Average annual cost (EAC) | Value after 40 years | What that cost you | % of the zero-cost outcome lost |
|---|
The annual cost here is the Effective Annual Cost — everything you pay to hold the money, as one percentage. It is netted off the gross return arithmetically, so 10% gross less a 1% annual cost is 9% effective. No fund, platform or provider is named, and no level of cost is presented as reasonable or unreasonable. That is a judgement about a specific arrangement, and this page does not make it. This assumes the same cost every year. Most products cost more at the start, so treat these as a fair average rather than a precise quote.
What your cost took over 40 years
R0
Share of the zero-cost outcome that is
0.0%
None of this is financial advice.
Some products cost more for good reason. An actively managed fund, a guarantee, a structure built to do a particular job — those carry costs a plain tracker does not, and sometimes that cost buys something you genuinely need. A higher fee is not automatically a bad one, and the cheapest option is not automatically the right one.
The table shows the other half of it. A cost you are carrying for no particular reason still compounds, every year, for as long as you hold the money. Each 1% takes roughly a fifth of what you would otherwise have ended up with. At 3% you keep less than half.
Same contributions. Same growth rate. Only the cost changed.
So the question is never "is this fee high?" It is "what is this fee buying, and do I need it?" That is a conversation for you and your licensed adviser. Take these numbers to it.
You will hear the term EAC. It stands for Effective Annual Cost, and it is simply the total you pay each year to hold your money somewhere — everything, added together, as one percentage.
It is worth knowing because the headline fee is rarely the whole story. There is often a product fee, a platform fee and an advice fee, and the one that matters is the sum of them.
That total is what the table above is showing. Ask your adviser for it — they will have it.
One thing to watch: EAC is often higher in the early years, because upfront and advice charges weigh more at the start. The rows above use a single average cost across the whole forty years, which keeps the arithmetic simple — but if yours is front-loaded, the real effect is a little worse than shown. The money taken early is the money that had the longest to grow.
In South Africa, anyone who advises on or sells a financial product has to be authorised by the FSCA — a licensed Financial Services Provider, or a registered representative of one.
That is not paperwork. It is the difference between a regulated product you have recourse against and somebody's private arrangement.
If a product is not being sold by a licensed FSP, treat that as your answer. There is almost never a good reason for it. Whatever return is being promised, and whatever the explanation for why the usual rules do not apply in this particular case — walk away. The explanation is the warning.
Ask for the FSP number before you sign anything, and check it. Anyone legitimate expects that question and will not mind it.
We are not an FSP either. We do not sell financial products at all, and nothing here is a product recommendation. That is exactly why we can afford to tell you to check.
Choosing the product is your financial adviser's work, not ours. We are not licensed for it and do not want to be, and a good adviser earns their keep.
Ours is the bit alongside it: which wrapper the money sits in, whose name it is in, and which tax year it happens in. Get the product right and the structure wrong and you still give away more than you needed to.
The two work best together.
This page does one thing. It shows what your contribution, your annual increase and your cost do to forty years.
We run more detailed models than this — ones that take account of the different wrappers money can sit in, how each is taxed, what your own marginal rate does to the answer, and when one becomes better than another. Those work off your actual numbers rather than three sliders.
They do not replace your financial adviser. They are what you take to them, so the two of you are deciding with the tax consequences already on the table instead of working them out afterwards.
If that would be useful, book a call and we will run yours.
This is a computed illustration, not financial advice. Accounting Connect is a SARS-registered tax practitioner (PR-0025122), not an authorised financial services provider. Nothing here names, ranks or recommends any fund, platform or provider, and nothing here is a recommendation to invest.
We do not sell financial products and earn nothing from what you hold or where you hold it. Nothing here ranks a provider or suggests what level of cost is reasonable — that depends on the arrangement and on what you need it to do.
Contributions are made monthly, at the end of each month. The annual increase steps once a year, on the anniversary, not every month. The growth rate you set is an effective annual rate, converted to a monthly rate geometrically: (1 + r)1/12 − 1. The rate you set is the gross return, and your annual cost is netted off it, so the headline figure is what is left after cost.
One steady growth rate, every year. Real markets do not do that, and a bad first decade is not the same as a bad last one. Every figure is before tax and before inflation, so the year-40 number is in today's rands only in name.
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