discovery flexible investment plans€¦ · our flexible investment plans have minimum investment...

FLEXIBLE INVESTMENT PLANS

DISCOVERY

CONTENTSFLEXIBLE INVESTMENT PLANS

Features of a Flexible Investment PlanAccess 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.

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.

Read the Flexible Investment Plan

Fact File relevant to your investment

MINIMUM INVESTMENT AMOUNTYounger than 30 30+

R5 000 R60 000

INVESTMENT TERM

Short term Medium term To retirement

INVESTMENT GUARANTEES

For investments of R100 000 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

AT A GLANCE

Investing a lump sum can help you to save towards the lifestyle you aspire to. When you invest R100 000 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.

LUMP-SUM CONTRIBUTION



INVESTMENT TERM

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

RECURRING CONTRIBUTION

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 AMOUNTYounger than 30 30+

R300 a month R850 a month



A LUMP-SUM OR RECURRING CONTRIBUTION

MINIMUM INVESTMENT AMOUNT

Age Lump-sum Recurring

If you are under 30 R5 000 R300 a month

If you are 30 or over R60 000 R850 a month

Our Flexible Investment Plans have minimum investment amounts. If you invest R100 000 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.

DECIDING HOW TO INVEST



WHY THE DISCOVERY FLEXIBLE INVESTMENT PLANS?

The behaviour

Invest longer

Invest more

and remain invested for as long as possible

by having a qualifying lump-sum Retirement Annuity or Preserver Plan with Discovery Invest

Live well 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.

Discount on admin fees: Get up to 100% discount on your admin fees

+

+

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

Invest more

and remain invested for as long as possible

by having a qualifying lump-sum Retirement Annuity or Preserver Plan with Discovery Invest

Live well 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.

Discount on admin fees: Get up to 100% discount on your admin fees



INVEST MORE, INVEST FOR LONGER AND LIVE WELL - LUMP SUM

Your behaviour What you get

You save for retirement

When you invest for longer and live well

Protection Protector against fund underperformance

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.

For an extra premium, you can get protection against fund underperformance.

Invest more, invest for longer and live well

We reward you for saving for investing more, investing longer and living well.



INVEST MORE, INVEST FOR LONGER AND LIVE WELL – RECURRING

Your behaviour What you get

When you invest for longer and live well

Protection Contribution waiver

You can receive a discount of up to 100% on your yearly admin fees.

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.

Invest more, invest for longer and live well

We reward you for investing more, investing longer and living well. You can also choose to get protection against life events.



A WIDE CHOICE OF FUNDS TO INVEST IN

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.

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.

You can invest in funds managed by top external investment managers.

THERE ARE ALMOST 200 FUNDS TO CHOOSE FROM

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.



https://www.discovery.co.za/portal/

FEES FOR YOUR INVESTMENT

THERE ARE CERTAIN FEES THAT APPLY TO OUR FLEXIBLE INVESTMENTPLANS

FEES TO DISCOVERY INVEST

There are no initial investment fees to Discovery Invest. We charge a yearly admin fee, which depends on the size

of your investment.

FEES TO THE INVESTMENT MANAGER

Investment managers may charge initial and ongoing fees.

You can find these fees on the relevant fund fact

sheets available at

FEES TO YOUR FINANCIAL ADVISER

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.




READ THE RELEVANT FACT FILE AND SPEAK TO YOUR FINANCIAL ADVISERThe 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 0860 67 57 77.

GM_61907DI_14/10/2019_V4

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.

Discovery Invest

www.discovery.co.za



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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%.

LINKED PAGESTHIS IS HOW TAX WORKS



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.



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.



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.



ADVISER

ADVANTAGES OF USING A FINANCIAL ADVISERTHINGS TO DISCUSS WITH YOUR 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.



Purple Invest clients can look forward to a range of additional benefits, including the following:

1 Additional contributions consist of ad-hoc contributions and reinvested Discovery Life PayBacks. Please note that additional contributions can’t be made into Preserver Plans.

This document is meant only as information 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. Product rules, terms and conditions apply. Discovery Invest reserves the right to review and change the qualifying requirements for benefits at any time.

For the Discovery Retirement Optimiser: the assets of the underlying Fund, the Discovery Retirement Annuity Fund, are invested in a policy of insurance that is underwritten by Discovery Life Limited, a registered insurer: Registration number: 1966/003901/06, an authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. All benefits are offered through the insurer, Discovery Life Limited, and product rules, terms and conditions apply.

Our investments provide value beyond the performance of your funds, with rewards for taking responsibility for your financial future. With our Purple offering, clients get access to a range of exclusive benefits that enhance these rewards. The Purple Flexible Investment Plan is available to clients with a fund value of at least R5 million. Purple Retirement Annuities, Preserver Plans and Living Annuities are available to clients with an investment of R3.5 million or more.

You can get up to 75% of the

asset management fees charged

on your Flexible Investment

paid into the boost on your lump-sum retirement savings.

For investing longer, you can convert up to 65% of the value of your retirement

savings in your Discovery Retirement

Optimiser into tax-free cash, from your

life cover.

For investing longer, you can enjoy higher boosts on your

pre-retirement lump-sum contributions into qualifying

Discovery funds of up to 25% on your initial contribution and for

investing more, you can get up to 35% on additional contributions1. You also enjoy exclusive access to

boosts on external funds of up to 12.5% on your initial contribution

and up to 17.5% on additional contributions1.

For making responsible income withdrawals

and living a healthy lifestyle, you are rewarded with boosts of up to 50%

to your monthly income in retirement on your

investment in qualifying Discovery funds, for

life. Purple Invest clients exclusively enjoy boosts on

external funds of up to 15%.

UP TO 75% OF ASSET MANAGEMENT

FEES PAID BACK

CONVERT MORE LIFE COVER TO

TAX-FREE CASH

BIGGER BOOSTS ON A WIDER RANGE

OF FUNDS

INCOME BOOSTS FOR LIFE

Flexible Investments

Living Annuities

Lump-sum Retirement Annuities and Preservers

Discovery Retirement Optimisers

DISCOVERY PURPLE INVESTMENTS

THE TAX-FREE FLEXIBLE INVESTMENT PLAN IN ACTION

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.

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 R33 000 a year, or R2 750 a month with a lifetime limit of R500 000. 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 R10 200 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 R5 000.

INVESTMENT OPTIONS

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.

UNDERSTANDING THE FEES YOU NEED TO PAY

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.

Years

TAX-FREE VS TAXABLE INVESTMENT

R250 000 Tax saving of R73 050.76

R200 000

R150 000

R100 000

0 1 2 3 4 5 7 119 136 8 1210 14 15 16 17 18 19 20

R50 000

R0

Assumptions: 20% dividend tax, 13.67% capital gains tax, 40% marginal tax rate,R33 000 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



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