Discovery Invest has launched the Family Wealth Consolidator, which aggregates investments across a family, such as a husband and wife, increasing assets under management and thus lowering fees.

The digital platform also allows family members, such as spouses, to view each other’s investments or to help an elderly relative by monitoring their investments.

It does not, however, give family members the right to draw from or alter each other’s policies.

Eligible investments

Savings can include tax-free savings, retirement annuities, family trusts and family-owned companies, as well as multiple investments under Discovery’s Cogence platform.

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Cogence is Discovery Invest’s wholly owned discretionary fund manager that aims to actively manage a portfolio. Its investments are managed by the world’s largest asset manager, BlackRock, and locally by RisCura.

Parents can also make an annual tax-free donation of up to R150 000 to their children and include any of their children’s savings on the platform.

As assets grow, clients benefit from cheaper administration fees.

Discovery notes that 38.5% of South African households include parents and children living together, yet only 19% of affluent investors use the same advisors as their parents.

Traditionally, each investment is assessed individually for fee purposes.

By way of example, the main investor with R4 million invested pays a 0.4% admin fee, while the spouse with R3.5 million invested pays a 0.43% fee.

With the Family Wealth Consolidator, the family group’s investments are aggregated, giving a total investment value of R7.5 million and dropping the fee to 0.3%.

Access without control

Craig Sher, head of research and development at Discovery Invest, says the process requires a “two-way agreement” between spouses or family members.

If a child or principal investor was aiding their elderly parents in some way and it was on the Discovery Invest platform, they would have sight of assets but would not be able to draw from their investments, he said.

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Through its integration with Discovery Bank, which underpins the group’s products and rewards, Discovery Invest clients with a Vitality Money status (which rewards good financial behaviour) and investments held on the Discovery Cogence platform will also earn money back, which they can then reinvest.

The group says Vitality Money Paybacks enable the lowest asset management fees in the industry.

Rewards and benefits

Discovery pursues a model of “shared value” by encouraging healthy financial and lifestyle behaviour.

This saves the firm money on life or car insurance, medical aid and other claim payouts, and it uses some of these savings to reward clients for healthy lifestyle, driving or spending behaviour.

Discovery Invest has more than R200 billion in assets under management and has paid back R26 billion in rewards.