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: The full death benefit of an ILLA can be transferred to your beneficiary/-ies as a life annuity, to provide income until the capital is depleted. The beneficiary/-ies may also choose to accelerate the income over a period of five years. 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 5 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. Consult your financial advisor or tax consultant for more information.



• Contractual products
  Tax on the benefits of contractual 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.
  
  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.



• Exemptions for individuals (2011 – 2012)
  
  • Dividends received or accrued from South African companies are not subject to tax. A dividends tax, to replace STC (Secondary Tax on Companies), is to be introduced with effect from 1 April 2012.
  • 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.


• 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. The foreign interest and dividend exemption is limited to R3 700. The amount of R3 700 is included in the above exemption amount. This exemption is not available to trusts.