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22Seven launches first mobile tax-free investment platform: Christo Davel – CEO and founder, 22Seven

An Old Mutual-owned money management application for tax-free savings.

[Apologies for the poor line, See the 22Seven.com website for more information]

SIKI MGABADELI: With the advent of tax-free savings accounts we are going to be looking at the various options available to you in the South African financial landscape. Today we speaking to 22Seven, the Old Mutual-owned money management application which announced the launch of their investment options. Founder and CEO of 22Seven Christo Davel says that by introducing investments 22Seven is starting to bridge the gap between what people do with their money now and what they want to do with it in the future. Chris joins us now. Thank you so much for your time today. Let’s just go back to basics, Christo. What is the tax-free savings account?

CHRISTO DAVEL: Hi, Siki, and thanks for having me. Basically the government announced legislation that was implemented from March 1, where it encourages people to save money, and then to make sure that … are completely tax-free.

SIKI MGABADELI: I think for those who aren’t familiar with 22Seven and your application, let’s just explain how it works. My understanding is that it gives the consumer a view of exactly what’s happening with their money, what’s going in, what’s going out, and in that way helps them to free up some cash.

CHRISTO DAVEL: Exactly. Your money … a free application. You can download it from iStore of from Google Play, or you can go on the web, to 22Seven.com. What it is, is it allows people to pull all the information together in one place and … it does an automatic budget for you. Instead of you having to put in a target that you have, it uses your actual behaviour in the past to predict where you are and where you will be, and it just helps people become aware of their money. It’s a free money-management app – that’s the basic way to describe it.
    And the admin now of the investment option, ….as I said earlier, the actual money that they have available makes it easier for them to save.

SIKI MGABADELI: So how would they do it, then? Could you do it through the app? How does it work?

CHRISTO DAVEL: Well, we are actually the first offering in South Africa that allows people to invest completely…in the model. So you don’t have to go a physical building, you don’t have to fill in pieces of paper. It even includes…on your mobile. So once you have downloaded the app…it’s easy to make your choices. People are able to do the entire process quite intuitively and we’ve had a huge uptake. I’m very, very glad with the response we’ve had.

SIKI MGABADELI: What are they investing in, Christo?

CHRISTO DAVEL: They are investing in unit trusts managed by Old Mutual, tracker funds or rather index funds. It’s a low-cost index fund, then people track the stock market, so it’s long-term savings. It’s not for peole wanting to save money to buy a new iPad or to go on holiday next month. This is for long-term savings. You save four, five or longer years. For now you are going for them. It’s an awesome opportunity to put money to be a participant in the economy as opposed to just being a consumer of the economy.

SIKI MGABADELI: I was actually going to raise that question because one of the criticisms that we get about why we are not a huge savings nation is that people tend to cash out their investments, their pension funds and so on. How easy do you make it for people to take their money out whenever they choose?

CHRISTO DAVEL: Well, they can still do that. The things is – part of this legislation from the government was to make sure that the industry makes new products you need to understand, that they are all low-cost, and there is no penalty for people taking money out. So even though this is aimed for a long-term situation, you are not penalised when you take the money. But, as you are saying, Siki, it’s not the smart thing or the wise thing to do. We are hoping that people, when they make these investments, will save their money for quite some time and have the beautiful compound growth that they get.

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