DISCOVERY FLEXIBLE INVESTMENT PLANS

Transcription

1 DISCOVERY FLEXIBLE INVESTMENT PLANS

2 CONTENTS FLEXIBLE INVESTMENT PLANS

3 WHAT IS A FLEXIBLE INVESTMENT PLAN? Our Flexible Investment Plans allow you access to your money when you need it. These plans have benefits that reward you the longer you stay invested, the more you save and the healthier you become. You can choose to invest a lump sum or monthly amount. For more information about our Tax-free Flexible Investment Plan,. Continue reading for information about our Flexible Investment Plan. Features of a Flexible Investment Plan Access to your money whenever you need it. You are responsible for paying the tax on the investment. If you die while invested in a Flexible Investment Plan, the proceeds of your investment will be paid to your estate.

4 AT A GLANCE LUMP-SUM CONTRIBUTION INVESTMENT TERM Short term Medium term To retirement Investing a lump sum can help you to save towards the lifestyle you aspire to. When you invest R or more, you also get a boost to your investment if it doesn t perform in the top 25% of its sector. The longer you remain invested, the more you can get out. MINIMUM INVESTMENT AMOUNT Younger than R5 000 R INVESTMENT GUARANTEES For investments of R or more, for an extra premium you can get a boost to protect you if your funds underperform. Depending on how your funds perform, you get a portion of the boost after five years, and the balance after 10 years. TAX Your personal rate of tax on investment growth 20% on dividends FEES Discovery fees Financial adviser fees Investment manager fees You get a discount on your admin fees based on your Vitality status, the amount you invest in qualifying funds and how long you re invested. READ THE RELEVANT FACT FILES FOR DETAILS OF: The fees and discounts How the performance protector works How you can get investment manager fees back if you have a qualifying Retirement Annuity or Preserver Plan

5 RECURRING CONTRIBUTION INVESTMENT TERM Short term Medium term To retirement Investing recurring amounts helps you to be committed to your savings plan and the money builds up over time. We give a discount on your admin fees to Discovery Invest based on your Vitality status, the amount you invest in qualifying funds and how long you re invested. This means you have more money to invest and grow. MINIMUM INVESTMENT AMOUNT Younger than R300 a month R850 a month INVESTMENT GUARANTEES You can protect your investment against unexpected life events with a Contribution Waiver that pays your contributions for you if you become severely ill or disabled while you are invested. This benefit comes at an additional premium. TAX Your personal rate of tax on investment growth 20% on dividends FEES Discovery fees Financial adviser fees Investment manager fees Policy fees You get a discount on your admin fees based on your Vitality status, the amount you invest in qualifying funds and how long you re invested. READ THE RELEVANT FACT FILES FOR DETAILS OF: How the fees and discounts work The exclusions that apply to the Contribution Waiver How you can get investment manager fees back if you also have a Retirement Annuity or Preserver Plan

6 DECIDING HOW TO INVEST A LUMP-SUM OR RECURRING CONTRIBUTION Our Flexible Investment Plans have minimum investment amounts. MINIMUM INVESTMENT AMOUNT Age Lump-sum Recurring If you are under 30 R5 000 R300 a month If you are 30 or over R R850 a month If you invest R or more, for an extra premium you can get a boost to your investment if your funds underperform. If you invest more than R5 million, you get even more rewards as a The Discovery Purple Collection is an exclusive suite of risk, wealth and wellness products designed to deliver our most comprehensive benefits and unsurpassed rewards.

7 WHY THE DISCOVERY FLEXIBLE INVESTMENT PLANS? UNIQUE BENEFITS OF OUR FLEXIBLE INVESTMENT PLANS Our Flexible Investment Plans allow you to access your money whenever you need it. However, we reward you the longer you stay invested, the more you invest and the healthier you become. The behaviour Invest longer and remain invested for as long as possible + Invest more + Live well by having a qualifying lump-sum Retirement Annuity or Preserver Plan with Discovery Invest by living a healthy lifestyle Get rewarded with a discount on your yearly admin fees of up to 100% and up to 50% of your asset management fees back.

8 INVEST MORE, INVEST FOR LONGER AND LIVE WELL - LUMP SUM We reward you for saving for investing more, investing longer and living well. Your behaviour What you get Invest more, invest for longer and live well You save for retirement When you invest for longer and live well You get up to 50% of the investment management fees you pay on this plan back as additions to your retirement boost. You can receive a discount of up to 100% on your yearly admin fees. Protection Protector against fund underperformance For an extra premium, you can get protection against fund underperformance.

9 INVEST MORE, INVEST FOR LONGER AND LIVE WELL RECURRING We reward you for investing more, investing longer and living well. You can also choose to get protection against life events. Your behaviour What you get Invest more, invest for longer and live well When you invest for longer and live well You can receive a discount of up to 100% on your yearly admin fees. Protection Contribution waiver You can purchase Contribution Waivers for severe illness or disability on your recurring contributions. Contribution waivers ensure that your contributions continue in the event of ill-health or disability. This benefit comes at an additional premium.

10 A WIDE CHOICE OF FUNDS TO INVEST IN THERE ARE ALMOST 200 FUNDS TO CHOOSE FROM YOUR PLAN IS A COLLECTION OF FUNDS Once you have chosen your investment plan, you decide which funds to invest your money into. Your decision should align with the investment strategy that you and your financial adviser agreed on and the investment goals you have. You can invest in Discovery funds where our investment managers pick the right blend of asset classes (shares, bonds, cash, property and so on) to reach your investment goals. We have that make it easier for you to get what you want from your investment. You can invest in funds managed by top external investment managers. We offer you access to a range of unit trust funds across various investment managers through a single entry point. This means you can invest in our investment plans and choose investment funds that are managed by leading investment managers. Discovery funds (with the exception of the Discovery Money Market Fund) qualify for fee discounts and asset management fee refunds on your investment. The list of qualifying funds may be updated from time to time and can be seen on individual fund fact sheets available at We offer both local and offshore investment opportunities.

11 FEES FOR YOUR INVESTMENT THERE ARE CERTAIN FEES THAT APPLY TO OUR FLEXIBLE INVESTMENTPLANS FEES TO DISCOVERY INVEST FEES TO THE INVESTMENT MANAGER FEES TO YOUR FINANCIAL ADVISER There are no initial investment fees to Discovery Invest. We charge a yearly admin fee, which depends on the size of your investment. Investment managers may charge initial and ongoing fees. You can find these fees on the relevant fund fact sheets available at Financial advisers will charge initial and ongoing advice fees for the advice they give. Refer to the relevant Fact File for more information about all fees.

12 READ THE RELEVANT FACT FILE AND SPEAK TO YOUR FINANCIAL ADVISER The details of the features we offer are set out in the relevant Fact File at Speak to your financial adviser to help you make informed decisions about your investments. If you don t have a financial adviser, you can contact our call centre on Discovery Invest This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply. GM_55739DI_20/11/2018_V10

13 LINKED PAGES THIS IS HOW TAX WORKS Your contributions into your investment are not tax-deductible and investment gains will be subject to tax, depending on your individual rate, taking into account your rebates. Discovery Invest will issue you with IT3B and IT3C tax statements for this purpose. It is your responsibility to pay the applicable tax on your chosen Flexible Investment Plan. Discovery Invest is required to withhold dividends tax at a rate of 20%. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

14 WE OFFER YOU PROTECTION AGAINST FUND UNDERPERFORMANCE For an extra premium, you can get protection against fund underperformance. We match 10% of your investment in qualifying Discovery funds, and 7.5% of your investment in other funds, and invest it at a fixed rate of 6% each year. After five years, if your investment funds are not in the top 25% of funds in their sector, we will pay up to 100% of this benefit into your investment plan. After 10 years, we pay the rest of this benefit into your investment plan. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

15 WHAT HAPPENS TO YOUR INVESTMENT WHEN YOU DIE? In the event of your death, the proceeds from your plan will be paid to your estate and distributed according to your will. If you chose protection, any remaining protector against fund underperformance will fall away. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

16 UNIQUE DISCOVERY FUNDS Your contributions to your investment will be invested in the underlying investment options that you have selected. Escalator Funds have built-in protection if the markets fall. These Discovery funds guarantee that you will always get at least 80% of the highest unit price the fund has ever reached. This gives you the peace of mind that if the markets were to fall, your investment value would be protected. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

17 ADVISER THINGS TO DISCUSS WITH YOUR FINANCIAL ADVISER ADVANTAGES OF USING A FINANCIAL ADVISER Longevity We re living longer and that has changed traditional retirement practice. A potentially longer retirement timeline means that you need to save more money and that you need to invest your money differently in the years leading up to retirement. The unpredictable nature of markets Markets are unpredictable. They can go up one day and down the next. These market changes are risks to your investment because if you have to withdraw your money while there is a market downturn, you might lose money on your investment. When you have a longer investment horizon you can afford more risk, but as retirement approaches you need to consider moving money to lower-risk investments. The impact of inflation Inflation is the rise in the cost of living. This means you will pay more for the same goods and services tomorrow than you do today. When you are investing for your future, it s important that the money you invest grows at the same or higher rate than inflation. Compound interest Because of compound interest, the more time you have available to invest, the greater your benefits will be in retirement. Diversifying It s important to spread your investments among different asset classes, such as equities (shares), bonds, property and cash. This will ensure that your risk is spread so if one asset class performs poorly, the value of your other investments can make up for this. How much risk you can afford to take Your investment strategy starts with understanding your attitude to risk. Generally, the higher the potential risk of an investment, the higher the potential return. Different asset classes like cash, bonds, property and equities have different levels of expected risk and return; cash has low levels of expected risk and return, while equity has high levels of expected risk and return. Knowledgeable about managing money Financial advisers are qualified in financial planning and can help you decide on and keep track of your investment goals, savings strategies and retirement options. High standards of competence To give expert financial advice, financial advisers need to meet certain standards of competence, including professional qualifications, passing regulatory examinations and undergoing training. Licensed to sell certain products We only allow financial advisers who are registered with the Financial Sector Conduct Authority (FSCA) to sell you specific financial products. They are required to have extensive knowledge of the product they are recommending to you, and they must be competent (professional and skilled) in the financial advice they provide. Objective advice Our code of conduct for financial advisers is strict: our advisers must be able to give clients objective advice about the products they buy so that they can make informed decisions. It s essential that clients best interests are at the heart of everything our advisers do so they must avoid or disclose any conflicts of interests. At the core of everything is treating clients fairly. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

18 BENEFITS YOU CAN RECEIVE FROM OUR PURPLE PLANS The Discovery Purple collection is an exclusive suite of risk, wealth and wellness products designed to deliver our most comprehensive benefits and unsurpassed rewards WITH A LUMP-SUM PURPLE RETIREMENT ANNUITY: Get a boost to your initial lump-sum investment of up to 25%. Get boosts on extra contributions you make (ad hoc contributions) of up to 30%. Enjoy zero admin fees from day one if you decide to use your boost amount to pay for the fees on your investment and get a further yearly rebate amount of 0.2% to offset investment management fees. Get boosts on reinvested Life Plan Paybacks of up to 35%. Get up to 75% of the investment management fees you pay on the Flexible Investment Plan back as additions to your retirement boost. WITH OUR PURPLE FLEXIBLE INVESTMENT PLANS: Get up to 75% of the investment management fees you pay on the Flexible Investment Plan back as additions to your retirement boost. WITH A LUMP-SUM PURPLE PRESERVER PLAN: Get a boost to your initial lump-sum investment of up to 25%. Enjoy zero admin fees from day one if you decide to use your boost amount to pay for the fees on your investment and get a further yearly rebate amount of 0.2% to offset investment management fees. Get up to 75% of the investment management fees you pay on the Flexible Investment Plan back as additions to your retirement boost. YOU CAN RECEIVE FURTHER BENEFITS IF YOU HAVE A PURPLE DISCOVERY LIFE PLAN You may qualify for an enhanced Life Plan Optimiser percentage on your Discovery Retirement Optimiser. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

19 DISCOVERY TAX-FREE FLEXIBLE INVESTMENT PLAN PLANNING FOR YOUR FUTURE Saving is an important part of planning for your future. The Income Tax Act allows financial institutions to offer a tax free savings account to investors. This means that you don t have to pay tax on any growth on the amount invested in your tax-free savings account. You can invest up to R a year, or R2 750 a month with a lifetime limit of R With the tax efficiency of Discovery s Tax-free Flexible Investment Plan, all the tax you would traditionally pay on investing is reduced to zero. HOW MUCH YOU NEED TO START INVESTING IN A DISCOVERY TAX-FREE FLEXIBLE INVESTMENT PLAN With the Tax-free Flexible Investment Plan, you can make a lump-sum investment of up to R33 000, or a minimum recurring investment of either R850 a month or R a year. If you are younger than 30, the minimum recurring investment is R300 a month, or R3 600 a year, and the minimum lump-sum investment is R THE TAX-FREE FLEXIBLE INVESTMENT PLAN IN ACTION TAX-FREE VS TAXABLE INVESTMENT R Tax saving of R The graph on the right shows the potential saving you could receive as a result of the tax-free growth when you invest in the Tax-free Flexible Investment Plan. It compares the growth of an investment in the Tax-free Flexible Investment Plan with the growth of a taxable investment over a 20 year period. R R R R R Years Assumptions: 20% dividend tax, 13.67% capital gains tax, 40% marginal tax rate, R lump-sum investment, 53% equity and 47% cash, investment return before tax of 10% These assumptions are for illustrative purposes only and are not an indication of future returns or fund values. Tax-free investment Taxable investment INVESTMENT OPTIONS UNDERSTANDING THE FEES YOU NEED TO PAY A comprehensive range of funds are available in our Tax-free Flexible Investment Plan to cater to your needs and risk profile. This includes both Discovery s own funds as well as a range of externally managed funds. There are no initial fees payable for the lump-sum and recurring Tax-free Flexible Investment Plan. Discovery Invest charges a yearly administration fee of 0.35% + VAT on Discovery funds and 0.55% + VAT on externally managed funds. These fees will be divided by 12 and deducted monthly. You will also pay a yearly investment administration fee depending on the funds you choose. Your financial adviser may charge initial and yearly fees for advice and the ongoing servicing of your plan. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.