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Liberty’s Evolve hits the R3bn Mark

21 October 2013 David Lloyd, Liberty

South Africans’ appetite for investment is still good as they start to reap the rewards of pay-on-delivery investing model.

Despite continued financial pressure consumers are faced with, Liberty is demonstrating that many South Africans are still willing to invest. Liberty’s innovative Evolve product range, which provides a pay-on-delivery model, has significantly exceeded expectations -attracting R3 billion in investments since launch just a year ago.

According to David Lloyd, Managing Director of Liberty Investments, this success is as a result of Liberty’s fresh approach to investing, and genuinely putting the investor first.

 
What sets the product apart and has proved incredibly popular with investors is the product’s simple client promise. If your investment does not achieve a target return of 14% per annum; then you do not pay for any of the upfront investment costs, including initial advice fees and set-up expenses. Liberty will pay the advice fees and absorb the set-up costs itself.

 
Lloyd says that advice fees and charges to cover the costs of setting up an investment have always been levied, irrespective of whether or not the investment ultimately delivers. But with the Liberty Evolve range, this is not the case. "Instead of paying for upfront costs, investors agree to share the growth of their investment for the first three years, but only if we can earn them 14% and they only share the growth above this.”

The R3 billion mark surpassed Liberty’s internal expectations in the first year of launch. In fact, within the first four months, Evolve customers had invested more than R1 billion.

"Through our knowledge and experience, we are constantly looking at better ways to design or enhance our products to suit our customer’s needs, while staying ahead of our competitors. Evolve is a good example of this.”

Lloyd explains that only with Evolve can customers partially invest for as little as 0.5 percent forever; compared to the industry average, in excess of 2 percent per year.

 
"Whilst on the surface this difference may seem insignificant, in saving for retirement, it all adds up. Twenty years on, an investor, who is paying 2 percent-a-year on their fees, could end up with up to 35 percent less of their total investment.” Investors will only pay more than 0.5%, if the total return of the JSE’s Top 40 shares is more than 14% a year in the first three years only.

 
This success of Evolve signals that South African’s are ready for this pay-on-delivery investing model.

 
"Our internal research shows the needs of investors in South Africa are expanding relative to the changing market dynamics. Investors are looking for an offering to meet their growing demands and have realised that the convenience of having a pay-on-delivery option, now a possibility that previously wasn’t a consideration, is invaluable. The adoption of a pay-on-delivery offering continues to gain momentum – with a significant increase of investors buying into this offering,” adds Lloyd.

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