For years, the retirement annuity conversation in South Africa has been dominated by one word: fees. Every comparison table, every advert and every “top RA” article seems to start there. And to be fair, fees matter. Excessive costs quietly erode long-term returns and advisers have done important work over the years in driving transparency and accountability across the industry.

But I worry that the conversation has become too narrow. Somewhere along the line, retirement planning became reduced to a race towards the cheapest possible product, as though price alone determines retirement outcomes. It doesn’t.

The uncomfortable reality is that clients do not retire on low fees. They retire on the rand value accumulated in their investment accounts over decades. Fees are one input into that outcome, but they are not the outcome itself.  

That distinction matters enormously for advisers. Over the last 20 years, the retirement industry has improved dramatically. The days of punitive exit penalties, opaque commission structures and layers of hidden costs are largely behind us. Most modern retirement annuities now operate within relatively competitive fee ranges. In many cases, the difference between providers may amount to fractions of a percentage point.

Yet many advisers still lead with cost as though it is the single defining variable. The risk is that we unintentionally reduce retirement planning to procurement rather than advice.

Clients deserve a broader framework.

In my view, there are four pillars that should shape every meaningful retirement conversation: fees, performance, optionality and behavioural consistency.

Fees - Fees absolutely belong in the discussion, but they need context. One of the challenges with modern fee comparisons is that they often present static snapshots of dynamic systems. The Total Investment Charge of today may look very different a year from now as assets under management scale, transaction costs normalise and operational efficiencies improve. A rapidly growing fund can temporarily show elevated costs precisely because capital is being actively deployed into underlying assets. That nuance is frequently lost in simplistic comparison tables.  

More importantly, fees should always be assessed alongside outcomes. A low-cost product that consistently underperforms may ultimately leave a client worse off than a slightly more expensive product delivering superior net-of-fee returns over time.

Performance - Performance conversations are difficult because they require balance and honesty. Advisers know there is no guarantee that historical outperformance will persist. At the same time, we cannot ignore the profound impact of compounded returns over a 20- or 30-year horizon.

An additional 1% or 2% annualised return over decades is not a rounding error. It is transformational. That is why advisers should spend less time debating headline platform fees and more time interrogating net-of-fee returns across meaningful market cycles. Has a fund navigated volatility effectively? Has it protected downside risk during drawdowns? Has the manager demonstrated consistency rather than isolated periods of strong performance?

The active versus passive debate also needs more nuance than it often receives. Passive investing has rightly grown in popularity because it offers broad market exposure at relatively low cost. But active management still has a role, particularly where skilled asset allocation and risk management can meaningfully improve long-term outcomes.

Neither approach is inherently superior. What matters is whether the investment philosophy aligns with the client’s objectives, risk appetite and investment horizon.