Frequently Asked Questions

Glacier offers a comprehensive, dynamic range of financial solutions suited to the affluent individual, and endorsed by the Sanlam Group. Glacier brings together some of the most respected financial services companies as product providers, and gives South Africans the benefit of a truly integrated, focused financial company.

Our extensive range of investment options and related financial services offerings include the following:

• Local and international investments
• Pre- and post-retirement solutions
• Stockbroking
• Fiduciary services
• Asset protection
• Personal cover and business assurance

Our solutions are designed to assist in creating and preserving wealth throughout your lifetime, while simplifying your financial affairs. They provide convenience, flexibility and simplicity. In essence, Glacier solutions can help you achieve your goals in the best possible way.

We offer you tremendous convenience when we take care of all your financial interests – all your investment instructions are accurately and speedily processed at one central point, in both the real and virtual worlds. Our systems are continuously developed and modified to integrate the latest technology to your benefit.

You have access to a wide range of choices so you can intelligently customise our solutions to meet your financial needs. All Glacier services and products are individually structured to your personal requirements, for your immediate and future needs. You can choose the underlying investments (typically collective investments) and products that, together, best match your risk profile and help you reach your financial goal.

* The minimum single investment amount is R100 000. Thereafter, clients can invest from
R1 000 monthly if they have invested the minimum lump sum.
**Depends on the selected stockbroker

We offer you competitively priced short-term insurance, reduced annual management fees on some collective investments, tax savings through some of our tax-friendly policies and funds, fee waivers when transferring your retirement savings from one Glacier solution to another, and competitive annual fees.

• What is a wrap fund?
  A wrap fund "wraps" together a selection of different collective investment schemes. These funds are selected to "match" different investor profiles, e.g. an aggressive investor and a risk-averse investor.
  
  A wrap fund isn't a registered collective investment scheme. Wrap funds aren't unitised, and each investor has direct holdings in the underlying unit trusts at all times.



• What is a Fund of Funds?
  A fund of funds is a collective investment which invests in other collective investment schemes. The funds are governed by the Collective Investment Scheme Control Act and are unitised portfolios.



• What is a Multi-Manager portfolio?
  A multi-manager portfolio usually invests mainly in segregated portfolios managed by different asset managers, but could also invest in collective investment schemes. A multi-manager portfolio could be structured as a collective investment scheme, or could simply be a portfolio into which life companies or retirement funds invest.

  	Fund of Funds (FoF)	Multi-Manager CIS Funds (MM)	Wrap Funds
  Structure	Use only Collective Investment Schemes (CIS)	Use mainly segregated portfolios, but may have limited exposure (20% of assets) to Collective Investment Schemes (CIS)	Use only Collective Investment Schemes (CIS)
  Regulation	Collective Investment Schemes Control Act (CISCA)	Collective Investment Schemes Control Act (CISCA)	Financial Advisory and Intermediary Services Act (FAIS)
  Taxation	Changes to the underlying portfolios by the multi-manager fund manager will not trigger a capital gains tax (CGT) event. Disinvestment from the fund triggers a capital gains tax (CGT) event	Changes to the underlying portfolios by the multi -manager fund manager will not trigger a capital gains tax (CGT) event. Disinvestment from the fund triggers a capital gains tax (CGT) event.	Changes to the underlying portfolios by the wrap fund manager will result in a capital gains tax event.
  Reporting	A fund of funds (FoF) is a registered CIS (Collective Investment Scheme) and is obliged to report performance quarterly.	A multi-manager CIS (Collective Investment Scheme) fund is a registered CIS (Collective Investment Scheme) and is obliged to report performance quarterly	Wrap funds are not registered and are therefore not obliged to publish performance figures.
  Pros	A FoF manager is able to seamlessly switch underlying portfolios as the market dictates. This makes a FoF flexible.	The multi-manager, in accordance with the objectives and strategy of his/her multi manager fund, stipulates the mandates of the underlying portfolios. Segregated portfolios can be far cheaper than CIS (Collective Investment Scheme), which can make the MM fund more cost effective.	A wrap fund manager is able to switch underlying portfolios as the market dictates. This makes wraps flexible. Underlying funds are easily recognised and understood as they form part of a MANCO's (Collective Investment Management Company) retail offering.
  Cons	Most FoFs negotiate rebates with the CIS they choose to invest in, which is usually passed on to the fund. However, a FoF is still a more expensive option than a multi-manager fund, which uses segregated portfolios as the underlying building blocks. The underlying investments are less visible to the client.	It can be difficult to switch out of or into a segregated portfolio on short notice, because the only investor in the segregated portfolio is the MM fund, i.e. the entire underlying portfolio may need to be liquidated, which can take time. It may be difficult to use a segregated portfolio as part of an active asset allocation strategy. Clients often don't recognise that segregated portfolios and retail unit trusts are managed by the same managers they know and find comfort in.	Performance is not always readily available. Changes in the underlying managers triggers a CGT event in the hands of the investor.

• Flexibility: Unlike a traditional life annuity, an ILLA is flexible, as you can choose the underlying investments. These may include collective investments, shares and fixed-interest instruments.



• Income: The traditional life annuity underwriter calculates a pension income according to your life expectancy. Depending on the version you choose, this may or may not increase annually. With an ILLA investment, you choose your own level of income – between 2.5% and 17.5% of your investment capital per year.



• Commutation of benefits on death:
  Beneficiaries may select any one of the following options –
  
  
  • They may take the full portion of their allocated benefit (less tax) in cash.
  • They may continue to receive an income by transferring their allocated benefit to an Illa in their name.
  • They may also take a portion of their allocated benefit (less tax) in cash and transfer the balance to an Illa in their name and continue to receive an income.
  
  Depending on the version you choose, a traditional life annuity can cease on death, continue until the death of the surviving spouse or offer a guaranteed period of generally five or 10 years. Should an annuitant pass away during the guaranteed period, the income payments to their beneficiary/-ies will continue for the remainder of the guaranteed period.



• Risk: The underwriter of a traditional life annuity bears the risk of an annuitant outliving his/her life expectancy. If you live beyond your life expectancy, you'll continue receiving your pension income until death and the underwriter bears the loss of the extra income paid.



• When investing in an ILLA, the annuitant bears the risk of outliving his/her income. You are responsible for maintaining your capital – should the capital be depleted, you'll no longer receive an income.



• In the case of a conventional life annuity, the underwriter bears the investment risk. In the case of an ILLA, the annuitant bears the investment risk, but will also get the benefit of better-than-expected investment returns (if any).

Glacier enables you to invest in a wide variety of collective investment schemes, offered by different companies, through one service provider. The administrative burden of investing in a range of different companies' schemes is therefore carried by Glacier, and not the investor.

Because Glacier buys units from the different companies in bulk, we are able to negotiate discounted initial fees with these companies, to the benefit of our clients.

Glacier has negotiated lower initial fees with collective investment management companies, resulting in a lower buying price on many funds. This means you can purchase more units with your capital. In addition, Glacier can offer lower annual fees on investments in collective investments.

Whether Glacier processes on the same day depends on the time that the request was received and the volume of purchase/repurchase instructions received on that day. Once processed, an instruction is sent to the relevant management company the next day. The management companies purchase/repurchase at the price on that day.

If we receive your instruction while any other instruction is in progress on your investment (e.g. switch, new business, repurchase, cost recovery, etc.), it may happen that an investment instruction or request will pend until the existing transaction in progress has been priced.

If you repurchase from a collective investment, your money should be available within a maximum of 4 working days. If you repurchase from a fund of funds, your money should be available after 5 working days. If you repurchase from a money market fund, your money should be available the following working day. As your money is deposited into your bank account via cheque, your bank may hold your money for seven days while the cheque clears.

To withdraw money, you need to provide a written, signed instruction to Glacier. What you can withdraw depends on the rules of the product. For instance, you may only make one withdrawal from a preservation fund before retirement and you require tax clearance from the South African Revenue Services (SARS) to do so, and you may not withdraw from a retirement annuity fund before retirement. You can withdraw electronically via the Internet in the case of discretionary investments.

You can access your investment details on Secure Services – speak to your financial intermediary or contact our Communication Centre on 021 917-9002 / 0860 GLA ENG (English).

• Discretionary investments
  The investor is liable for tax on discretionary savings plans at the end of the tax year. Capital Gains Tax is also applicable and is triggered by the disposal of an asset, for example a repurchase from a collective investment. Subject to certain exemptions allowed in the Income Tax Act, the investor will be taxed on interest and foreign dividends. A dividends tax, which replaced STC (Secondary Tax on Companies), was introduced with effect from 1 April 2012. Tax at a rate of 15% is withheld on dividends declared by South African resident companies. Consult your financial advisor or tax consultant for more information.



• Retirement products
  Tax on the benefits of retirement savings plans, such as retirement annuities and preservation pension funds, is only payable upon withdrawal, retirement and death. Tax will be deducted in accordance with the provisions of the Income Tax Act.
  
  Investors with an investment-linked living annuity (ILLA) pay tax on their income according to their personal tax scale.
  
  Interest and dividends accruing to these products are not taxable.
  
  Contributions to Retirement Annuities are tax deductible up to certain limits. Subject to certain exemptions in the Income Tax Act, the benefits payable upon withdrawal, retirement or death will be subject to tax.



• Tax Exemptions for individuals (2012 – 2013)
  
  • All interest received by or accrued to non-residents is exempt from tax provided the individual is physically absent from South Africa for at least 183 days, did not carry on business in South Africa and is not deemed to be ordinarily resident in South Africa during the year of assessment.
  • Non-residents are exempt of tax on dividends declared by dual listed companies, provided a declaration is completed informing Glacier of their non-resident status.


• Interest received:
  Persons under 65 - R22 800
  Persons aged 65 years and over - R33 000
  
  Interest includes distributions from property unit trusts and foreign interest and dividends.

Glacier Fiduciary Services provides you with a comprehensive report which will enable you to make informed decisions about the following issues:

• Tax planning;
• The instructions to note in your Will to achieve your succession objectives;
• Whether you need a trust, or if you already have one, whether it is functioning correctly;
• Using assurance solutions to provide for retirement or disability, and for dependants in the event of death;
• Whether to change the ownership of certain family assets and what the implications would be;
• The use of an offshore trust and/or company;
• Business planning – whether to separate trading from other investments, use of buy and sell agreements etc.

A will is essentially a contract one enters into with the person one wishes to take charge of dealing with all one’s assets (and liabilities) after one dies. A non-existent, unsigned or incorrectly signed will can cause practical problems and place surviving family members and dependants under immense stress when one is not around to assist them in making financial decisions.

If the signing requirements as set out in section 2 of the Wills Act are not complied with, the client does not have a valid will. If the client does not have a valid will, the deceased estate (assets and liabilities) will, on his death, be distributed in terms of the provisions of the Intestate Succession Act 81 of 1987.

These rules may well be contrary to the testator’s intentions and may not necessarily be beneficial to those left behind.

The potential advantages of establishing and inter vivos trust are as follows:

• Flexibility: A discretionary trust is extremely flexible, and can be administered so as to take into account changes over time in family, financial and legislative circumstances. This means the trustees can manage the trust’s assets in the best interest of the beneficiaries at any particular time by taking into account all relevant factors at that time. This flexibility caters for such uncertainties as divorce, insolvency, increase in family size or fortunes, and of course changes to tax legislation – which occurs on an annual basis.
  
• Tax planning: If created and operated with care and with appropriate advice from tax experts a trust can be administered so as to mitigate taxes such as estate duty, income tax, capital gains tax, donations tax and transfer duty (depending on the relationship between the settlor and the beneficiaries) for both the settlor and the beneficiaries. Also, the assets owned by the trust will not be subject to estate duty, capital gains and executor’s fees on the death of the settlor.
  
• Estate / succession planning: Trusts provide for the creation of flexible succession arrangements. Also, the assets owned by the trust will not be subject to cumbersome and often lengthy legal procedures after your death, as is the case with the administration of assets in your personal estate. Trust assets are accessible at all times, whilst assets in your personal estate are frozen during the estate administration process.
  
• Family asset management: A Trust can provide a centralised asset management structure and controlled distributions for beneficiaries who are not in a position to manage assets themselves. This may be due to minority, disability or prodigality. A trust can provide for joint ownership of indivisible assets like holiday homes and farms. Should the estate owner subsequently be mentally incapacitated through sickness or injury, a trust prevents the need for the appointment of a curator bonis to manage the founder’s affairs.
  
• Asset protection: A trust, which is set up and administered properly, can assist a family to protect assets from potential creditors, although care must be taken to ensure that transfers of property are not made in such a way as to prejudice creditors. The manner in which assets are transferred is also important and relevant to the extent of the protection. For example, if you transfer an asset on loan account, the amount of the loan account will remain an asset in your estate until the trust repays you. That means that the amount of the loan account will not be protected from creditors, only the increase in the value of the asset during the period of the trust’s ownership if it. However, over a period of time, as the value of the trust’s assets increase and the value of your loan account decreases, so will the benefit of asset protection be established. Remember also, that the ownership of the asset by the trust also means that it will not fall into your beneficiaries’ personal estates on your death, i.e. the asset will be protected from creditors of your beneficiaries.

A testamentary trust is established by will, and only comes into effect upon the death of the client. A family (or inter vivos) trust is established by contract (the trust deed) and comes into effect during the lifetime of the client.

When a corporate entity is appointed, there is the assurance of continuity. In contrast, an individual may die or become incapacitated. In the unfortunate event of litigation, a large corporate has the funds at their disposal to settle any claims for damages, whereas this might not be true for an individual.

Individuals with a monthly income of R30,000 and above. You don’t need to be an existing Glacier client.

Depending on the type of benefit for which you apply, certain medical information could be requested. There are benefits available that do not require any medical underwriting. Please speak to your financial intermediary about the best product for your needs.

This depends on your possible additional expenses due to the disability, and the amount of debt you have.

It is important to protect your income against unforeseen events such as illness or injury which could render you unable to earn an income and provide for your and your family’s financial needs.

Disability cover gives you a tax-free lump sum payment, should you become totally and permanently unable to continue in your regular occupation as a result of injury or illness. This gives you the ability to reduce debt or pay for the things you’ll need for a better quality of life.

However, a lump sum may not compensate for the loss of a regular income over a long period. You may be worried about how you’d take care of monthly responsibilities, such as home loans, car loans, groceries, utilities and child care costs.

An income protection benefit provides a monthly “salary”, should you lose your income or part thereof due to temporary or permanent disability (subject to a waiting period). This will ensure that you can continue providing for your family in the event of disablement.

Glacier Asset Protection provides personal and professional service and specialist advice with regard to all your short-term insurance needs.

Glacier Asset Protection is not contracted to any one insurer, so all advice they offer is independent. They have strong relationships with various insurers and are able to tailor-make solutions for you.

Specialised insurance cover, such as cover for artwork, jewellery, water craft, franchise operations. marine and engineering, can be arranged.

Glacier Asset Protection provides personal and commercial insurance cover. Their personal insurance covers areas such as household contents, specific valuable items, domestic buildings, vehicles, small craft, yachts, personal liability, and it includes specialised 4x4 cover.

Commercial and industrial insurance covers areas such as body corporate insurance, commercial buildings, marine insurance, and directors and officers insurance.

Glacier Asset Protection is managed by Associated Insurance Brokers (Cape) 2006 (Pty) Ltd (AIB), a subsidiary of Glacier Financial Holdings (Pty) Ltd. AIB is an independent brokerage with almost 30 years of experience and has a team of specialists who focus on helping clients make informed decisions with regard to their short-term insurance.