If you’re starting out on your investment journey or looking for an alternative investment broker, you should consider EasyEquities or Franc. Both platforms are local and offer amazing value in their respective niches and are proudly South African. Let’s dig into the differences and similarities of the two apps. Before we dig in, it’s worth explaining the basics, for those starting out.
How do Franc and EasyEquities work?
Brokerage apps in South Africa do the same as a human financial advisor/broker would do. You hand over your money and they will buy stock market investments on your behalf. Depending on the app, this could be shares, ETFs, unit trusts, fractional shares (CFDs) or similar things. In some cases, they can even give you advice through robo advisors and AI!
The broker gets a commission for every buy and sell order – and sometimes as an extra bonus to themselves, a platform fee and/or an assets under management fee – but more about these fees later.
The Franc app as an EasyEquities alternative
Franc was founded in 2018 by a diverse team comprising an engineer, actuary, investment expert, and tech enthusiast. The aim was to create a user-friendly investment app that democratises investing by making it accessible to everyone.
How does the Franc App work?
The franc app uses a robo advisor to establish where you are in your financial journey. You can enter your goals, strategy (and risk profile) and Franc will suggest where to invest your money.
Franc creates pre-built baskets of shares that you can buy with a click. You can invest in leading cash and equity funds such as Allan Grey money market and Sygnia ETFs.
EasyEquities
The Purple Group ($PPE), the owner of EasyEquities, is a listed company on the JSE. It is quite renowned in personal finance circles as an app with low fees and the ability to invest in a wide range of investments.
EasyEquities offers a wider range of investment options, including individual stocks and ETFs (Exchange Traded Funds). This gives you more control over your portfolio, but it also requires a bit more investment knowledge. Their research tools and charting options can help make informed decisions.
How does EasyEquities work?
EasyEquities can be very daunting to start with. As with all investment apps, to start off, you need to deposit money into their account. You have different accounts: ZAR, USD, Crypto and TFSA (Tax Free Savings Account) – to name a few. When switching between these accounts, you can invest in different things. For example:
- For a TFSA, you can invest in ETFs and unit trusts.
- For your ZAR account, you have shares and funds available to you for investment
- In EasyCrypto, you can buy crypto bundles and individual coins.
- EasyProperties allows you to buy shares in companies that own physical property
As some of these assets are speculative and high-risk (think crypto and single shares), you need to do your research thoroughly. EasyEquities is a jack of all trades – a one-stop shop for buying almost any digital (and some offline) investments.
EasyEquities vs Franc – an overview
| Feature | Franc | EasyEquities |
| Target Investor | Beginner | Informed Investor |
| Investment Options | Curated Baskets of ETFs and money market unit trusts | Stocks, ETFs, unit trusts, REITs, crypto, property and bundles. |
| Features | Automatic Investing | Fractional Shares, Rand & Dollar Investing, wider research tools |
| User Interface | Simple & User-Friendly | More Complex |
EasyEquities vs Franc: fees
So, EasyEquities and Franc need to charge fees to survive as a business. The business models are slightly different. EasyEquiries charges a fee per transaction, whereas Franc charges an asset under management fee. I’ve summarised the fees below. Note that there are special ways to not pay the platform fee, such as depositing money into your account. To avoid writing a thesis, I’ve summarised the fees below. A breakdown of EasyEquity fees can be found here, whereas Franc’s fees breakdown can be found here.
| Platform | Platform fees | Brokerage fee | Annual assets under management (AUM) fee | Withdrawal fee |
|---|---|---|---|---|
| EasyEquities | R25,00 | 0,25% per trade | R0,00 | R 150 |
| Franc | R5,00 | 1 % of the entire fund value | First 4 free annually R 10 thereafter. |
One thing that is challenging to calculate is the spread between the buy and the sell price. I’ve seen different spreads for different brokers, which leads me to believe that there is probably a difference here as well.
This does change over time, as supply and demand go up and down. For example, EasyEquities, as of 2024/04/06 had a spread of about 3% on the SYG500 and a spread of 2.88% for the STX40. I have requested an example of the spread of these two on Franc, and will update as soon as received.
Should I invest with Franc or with EasyEquities?
As with all good things in life, it depends. It boils down to risk profile and knowledge of the financial instruments you’re investing in.
Franc is an excellent choice for novice investors – The clueless people wanting to start doing something. We need to remember that the 1% fee is deducted from ALL assets under management for Franc, which will have an impact on your investment returns.
Though more advanced, you can invest in different assets with EasyEquities, including – shares, bonds, property and crypto. However, be careful! You might lose money if you don’t do your research properly.
Conclusion
Ultimately, the best platform depends on you.
Choose Franc if: You’re a beginner and want an easier user experience
Choose EasyEquities if: You have some investment knowledge, want more control over your portfolio, and value features like investment consolidation – ie to have your whole portfolio in one place.
Both Franc and EasyEquities can be excellent options for your South African investment journey.. If you’re looking for more info on EasyEquities, check out my honest review of EasyEquities here.
Happy investing!