Discovery launches new investment business unit: Discovery Invest Investing with the benefit of hin

Discovery today launched its much-anticipated investment offering, Discovery Invest to independent financial advisors around the country

Adrian Gore, CEO of Discovery said: "With Discovery Invest, we believe we have built a comprehensive investment product range that offers investors the lowest costs in the market and a unique choice of performance guarantees."

"Before entering this market, we looked at the obstacles investors face. Given the risks and complexity associated with investment products, choosing the right investment fund, the best asset manager and getting the timing right are all daunting dilemmas for the consumer."

"We also analysed the impact that it would have on consumers' investments if they had the capability to invest with no fees, and we made cost-efficiency a clear objective."

Gore says the global trend to consumerism has had a marked and positive effect on the South African investment industry. Consumers have benefited in recent years from lower prices, greater choice and the emergence of a new a breed of specialist asset managers. He believes it has, however, also lead to individuals bearing a greater deal of the risk associated with their investments.

"We've seen a transfer of risk to the individual and a greater degree of product commoditisation. That's where we believe we can add value."

In addition, Gore says, people are living longer through advances in healthcare and therefore need to save more for retirement. These factors all contribute to a need for greater protection for investors and more efficient products.

Discovery Invest introduces three fundamental changes to the way people can protect their savings:

1. By leveraging the tax efficiency of Discovery's existing life assurance platform, a flexible range of investment wrappers allows investors to tailor their investment product according to their needs;

2. Investors have the choice to protect themselves against poor investment decisions at pay-out stage by having their returns adjusted automatically  to what would have been the Right Choice;

3. Investors that integrate their investments with their existing Discovery Life Plan and their engagement in the Vitality wellness programme, could pay zero administration fees and asset management fees on Discoverys funds.

"Discovery has over the past fifteen years established its abilities in terms of product innovation, distribution and its unique capacity to integrate across its product ranges to unlock value and encourage wellness", said Gore.

"Discovery Invest plays to all of those strengths to give investors an innovative, more efficient alternative to other offerings in a market where price is currently the major differentiator."

As with Discovery's other offerings, integration across the Discovery product range creates added value and indirectly links Discovery Invest to the group's focus on encouraging wellness.

For example, existing Discovery clients who integrate the Endowment wrapper with their Discovery LIFE PLAN and their Vitality membership can receive discounts of up to 100% on Discovery Invest asset management and administration fees. Clients Vitality status, a measure of their overall engagement in their own wellness, plays a role in the extent of the discount on their investment fees.

Discovery Invest funds offer four different types of funds:

1. Discovery Invest Funds, incorporating single manager funds (through a joint venture with Investec Asset Management) and multimanager funds catering for various risk profiles;

2. Dynamically protected funds, which include the Right Choice Investments, offering the benefit of hindsight; Escalator Funds, which offer unlimited upside with downside protection; and the Dynamic Asset Optimiser, offering protection against the asset allocation risks associated with investment choice;

3. Special Purpose Funds, including the Target Retirement Date Funds, with dynamic asset allocation adjustments as investors approach retirement and risk appetite decreases. The two Alpha Funds (managed by Deutsche Bank and offered for the first time in South Africa), offer quantitative, synthetic equity indices and qualitative dynamic protection solutions;

4. Funds managed by external asset managers.

"We wanted to ensure that, when it comes to meeting their investment objectives, our clients experience inevitable success," said Herschel Mayers, CEO of Discovery Invest.

Mayers added the company was proud to partner with Deutsche Bank, Investec Asset Management and Investment Solutions in those areas where these leading asset managers specialised skills add to Discoverys own competencies, resulting in a best-of-breed offering.

"Our products will enable investors to avoid making the wrong investment decision by minimising the risk of an inappropriate choice of investment approach, geography, asset class or asset manager," said Mayers.

Of particular note, is the Right Choice range, which enhances the return on an investors investment decision. Investors receive at least 75% of any out-performance above the Discovery Equity Fund that would have been achieved from an alternative investment decision. This benefit, in effect, gives investors the benefit of making their investment choices with hindsight.

The Global Equity Protector fund offers similar protection against geographic underperformance, while Escalator funds will offer unlimited upside with a stop-loss feature, protecting against downside.

"By shifting assets between equities and cash, investors will be sheltered against downturns in the market, said Mayers. Individuals investments will never drop lower than to 80% of the highest value the Escalator Fund ever reaches".

"Not only are we protecting clients' hard-earned nest eggs, but we are also adding value to their savings by in some cases taking taxes, administration fees and asset manager fees out of the equation. If, for example, a client has R100 000 to invest, already has a Discovery Life policy and is actively engaged in the Vitality wellness programme, they could add up to R25 000 to their investment over five years," summarised Mayers.

"We believe no other player in the market so far has offered consumers the advantages of a mix like this. Discovery Invest is specifically designed to ease the impact of volatility and risk associated with the markets, unlocking value, ensuring efficiency and giving investors greater peace of mind," concluded Gore.