In an attempt to drive positive financial behaviour (and its bottom line), the EasyEquities trading platform will be introducing a fee on its mandatory Thrive loyalty programme at the end of this month — and the move has aroused the ire of thousands of clients.

The Thrive loyalty programme has been free since its launch about four years ago. But from the beginning of December, clients will be charged R25 a month, which is waived if they get to Level 3 of the loyalty programme. 

In a letter to affected clients, the company said that although it has more than 2 million registered users on its platform, only about 850,000 are regularly active — and EasyEquities wants to increase this number. 

Carel Nolte, the chief marketing officer of the Purple Group, which owns EasyEquities, told Daily Maverick the main aim of the mandatory Thrive loyalty programme and the R25 monthly fee was to assist users to be engaged with their portfolios. 

“We don’t simply want people who register and who don’t show investment discipline,” he said.

When the question of the Consumer Protection Act was raised, Nolte acknowledged that the Thrive loyalty programme was compulsory, but: “Users can choose not to be a client of EasyEquities with no penalties.” 

Under the Consumer Protection Act, consumers are not obliged to enter into additional agreements with suppliers from whom they purchase goods or services. 

The R25 monthly fee will apply to all clients, except those aged 21 and younger, or those aged 65 and older. In the letter to clients, EasyEquities said it had rewarded clients with the ability to earn zero brokerage fees across a diverse range of stocks which, over nine years, had saved the EasyEquities community more than R2-billion in brokerage fees alone when comparing fees to its nearest competitors. 

CEO ‘sleeps very easy’

In a somewhat less tactful response to an EasyEquities client on Twitter, Purple Group chief executive Charles Savage compared it to a free gym membership. 

“If you were offered free gym membership and the only thing you needed to do was walk into the gym once a month, I have no doubt you would take it,” he said. 

Savage ended his reply to the client with: “Storing, securing and keeping clients’ assets safe costs money, it’s not free. So, I sleep very easy on this change, it’s fair and reasonable and drives the right consumer behaviour. Those that are not willing to go to the gym once a month should not have free gym memberships.” 

A disgruntled client wrote on Facebook that he would be moving his entire portfolio, including both his children’s tax-free savings accounts, “out of pure principle. It’s so typical of money-hungry corporate SA. Get your clients in, then milk them. Yes, it’s R25 today. Next year, it will be R35. And to ‘reach a level’ will be more difficult.”

Over the year to 3 November, Purple Group’s share price has lost 62% to close at 70 cents on Friday afternoon. 

How the Thrive fee structure will work

As clients move up the 10 Thrive reward levels, each level earns them a 10% brokerage discount. Once they get to Level 3, the monthly R25 Thrive fee is waived.

The R25 fee will be deducted from their EasyEquities cash balance and if the cash balance is insufficient to cover the R25 fee, EasyEquities may sell some or all of their investments to cover the Thrive fees. 

Clients can achieve Level 3 status by:

• Depositing money in their account every month and withdrawing less than they put in; and
• Inviting one friend or family member to join EasyEquities each month and getting their account open and verified. DM