This post gives an overview and comparison of Living Annuity Platforms in South African.
What are LISPs?
A LISP lets the owner choose where to invest the money within the account.
The money will be deposited into a living annuity platform, which is usually a website or portal that you can use to view and manage your investments inside the living annuity. Often people that are not too savvy with money and financial matters will use a financial advisor to set up and control the funds.
LISPs can be used for various investment products:
- Retirement annuities
- Preservation funds
- Living Annuities
- Tax free savings accounts
- Regular Unit Trust Investment and Share Portfolio
- Endowment policies
The correct terminology is a LISP, a Linked Investment Service Provider. These financial intermediaries provide access to a range of funds from different management companies.
Living Annuity Platform Fee Comparisons
Below is a table of the LISP and their fees:
| Platform Name | Min Platform Admin Fee | Fees on Local Funds | Fees on external Funds | Number of Funds Available | Expense ratio on R10m (external) |
|---|---|---|---|---|---|
| Sygnia Alchemy (Pre 04-2025) | 0 | 0% | 0.5% | 62 | 0.25% |
| Glacier by Sanlam (Partner of Satrix) | R64 | 0.84% | 0.84% | 927 | 0.275% |
| Allan Gray Platform | 0 | 0.2% | 0.5% | 67 | 0.238% |
| OPN/PPS LIVING ANNUITY | 0 | 0.5% | 0.5% | ? | 0.238% |
| PSG Wealth | 0 | 0.35% | 0.575% | 460 | 0.217% |
| Absa Linked Investments (AIMS) | R228 | 0.75% | 0.75% | ? | |
| Ashburton Investments | 0 | 0% | 0.46% | 97 | 0.261% |
| Coronation Fund Managers Living Annuity | 0 | 0 | N/A | 23 (Only Coronation Funds) | 0% |
| Alexander Forbes Global Platform | 0 | 0.7% | 0.7% | 10 - 20 | 0.7% |
| INN8 Onshore | 0 | 0.5% | 0.5% | ||
| Liberty Bold | 1% | 0.5% | 0.5% | 190 | 0.25% |
| Wealthport | R20 | 0.5% | 0.5% | ||
| Sygnia Alchemy (Post 04-2025) | 0 | 0.35% | 0.4% |
Sygnia Alchemy: In April 2025, Syngia started charging a platform administration fee for Sygnia funds which previously had no fees associated
What are these Investment Products?
- Retirement annuities
- Preservation funds
- Living Annuities
- Tax free savings accounts
- Regular Unit Trust Investment and Share Portfolio
- Endowment policies
What is a Living Annuity?
A living annuity is an investment product that usally takes a single big contribution once as a lumpsum, usually from the proceed of the death of a family member or when you retire from your retirement annuity or similar product.
It must pay you an income in the form of monthly payments from 2.5% to 17.5% of the total value of the fund each year.
It is important to choose a living annuity provider service provider platform that has low fees and the ability to invest in many different funds – for a greater chance at sustained wealth growth.
The Pitfalls of Letting a Fund Manager and Financial Advisor Control your Living Annuity
Most people think they can just leave the management of their money to a financial planner or asset manager to grow the money in their fund. These people will pay a fee (Usually advisors will take the maximum of 1% + VAT which becomes 1.15%) for the advice and investment choices Then everything will be fine until retirement…in theory.
This is not how it works in reality.
In life things are rarely this easy.
Asset Management companies are for profit companies, they will look to maximise their profit through fees. They are not your friends and will never have your wealth goals as their number 1 priority.
Why you should manage your living annuity fund yourself:
- The EAC (Effective Annual Cost) of the whole investment including the investment management fee, advice, administration and other costs make up the Effective annual cost. This can be as high as 4-5%. Which means if you are drawing the minimum of 2.5% per annum your fund manager is taking more than you are each month from the fund or account.
- Fund Managers and Advisors will recommend and sometimes lock you into using their funds, even though other funds may be a higher quality, have better returns and be better suited for your portfolio. Under performing funds may be utilised simply because the fees on this fund go to the company of the person advising you. For example if you use PSG asset managers they will advise you/manage your investment to be fully invested in PSG funds. Which means they get 100% of the fees.
- The supposedly “highly specialised” buying and selling of assets (active management) is not really a highly specialised thing. Most people trading on financial markets do not know the future – and are taking calculated risks. They are simply investing in a diversified set of companies, properties and bonds which usually track an index. The amateur investing in a market / passive tracker like an ETF outperforms active investment management professionals on average. Check this: Warren buffet $1m for a charity with this passive investment call.
- It is your money, you should be responsible for it and understand exactly why, what and how things are happening the way they are. You can’t simply believe the tricks of fund managers showing you fake predictions for the future. Most of these don’t take into account the reality that markets sometimes do badly.
- Fees are constant, your returns are variable. Whether you make lots or little you will be paying a fixed amount of fees each year that can wither away the value of your living annuity.