Discovery Invest's shared-value model and boosted returns
Maybe you've heard about Discovery Invest's shared-value approach but aren't sure what it means and how it can benefit you. Here's a breakdown and four handy examples of how to earn boosts to your investments for practicing healthy investment behaviours.
How Discovery Invest's shared-value model works
Successful companies boost the economy as a whole - but society expects companies to make a difference while making a profit. We believe that a shared-value approach can lead to greater benefits for our own investors and for society.
The earlier you start investing, the longer your money has to grow in the market, and we generate surplus profit. We channel these profits back into boosts and extra rewards that encourage you to adopt healthy investment behaviours, like investing for longer, investing more, living well and managing your money wisely in retirement. This benefits society because fewer people will need to depend on state resources or their own children in retirement.
Since the launch of our shared-value model in 2015, we have been changing the way clients invest. On average, our clients invest three years longer, make 82% more additional contributions and withdraw 11% less in retirement*.
What are investment boosts and how do you earn them?
A boost is an extra amount of money that Discovery Invest rewards you with for maintaining the four healthy investment behaviours listed above. The amount you qualify for depends on factors like what type of investment you have, how long you stay invested and, in some cases, your Vitality status.
Your boosts are held separately to your investment and will grow in line with the growth of your selected funds or at a specified rate depending on your product choice. Ask your financial adviser to work out what boosts you can qualify for and how to increase your percentages.
Four examples of how Discovery Invest boosts work
| Behaviour | Discovery Invest boost |
|---|---|
| Investing longer | Zoe, a 30-year-old, starts saving for retirement early. She invests R300,000 in a Retirement Annuity. For investing longer, we give her an upfront boost of 20%, increasing her investment to R360,000. If her investment grows by 8% a year, it will be worth R5.3 million when she's 65 (compared to R4.4 million without a boost). |
| Investing more | Five years after her initial investment, Zoe contributes an extra R60,000 to her Retirement Annuity. We reward her for investing more with a boost of 20% to this extra contribution, bringing her total extra contribution to R72,000. If her fund achieves a growth rate of 8% each year after fees, Zoe's fund will be worth R6 million when she turns 65. If Zoe makes an additional contribution each year of R60,000, her fund value, including boosts, will be worth R17.1 million when she turns 65. |
| Withdrawing wisely | Zoe has reached retirement and withdraws 3% from her Living Annuity each year to provide an income for herself in retirement. If Zoe's fund value is R17 million, this equals R42,500 in income each month. If Zoe manages her health well with Vitality, she can get a boost of up to 50% to this income each month. This means instead of R42,500 income each month, Zoe will receive R63,750. |
| Living well | Jane starts contributing R5,000 a month to a Retirement Annuity. She invests the full amount in qualifying funds. Jane has silver Vitality Health and silver Vitality Drive statuses. She also has a gold status for Vitality Money. Jane achieves seven of her weekly goals for Vitality Active Rewards. This means that she gets a boost of 9% (5% + 1% + 3%), which equals R450 additional value on her monthly contribution of R5,000. |
A shared-value approach builds financial resilience and leads to greater benefits for individual investors, insurers and society. And the model works!
As at June 2024, we've accrued and paid more than R20 billion in shared-value benefits in the form of boosts, fee discounts and fee refunds.
You can watch this video to learn more about our investment philosophy.
*Discovery Invest internal data as at June 2024.
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. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06, a licensed life Insurer, an authorised financial services provider and registered credit provider, NCR registration number NCRCP3555. All boosts are offered through the insurer, Discovery Life Limited. The insurer reserves the right to review and change the qualifying requirements for boosts at any time. Product rules, terms and conditions apply
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