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Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Denitions
Allan Gray Living Annuity The name of this policy also referred to as `the policy. Allan Gray Life Allan Gray Life Limited, a registered insurer and governed by the Long-term Insurance Act. Administrator This is the company which administers your policy Allan Gray Investment Services Proprietary Limited is an authorised administrative nancial services provider. Annuitant The owner of the policy, who will receive the Annuity Income addressed as `you or the `policyholder. Annuity Income The regular income payable to you under this policy also referred to as `pension benet . This is your income before income tax is deducted. Investment Account The account through which the policy and the unit trust(s) you choose is administered. Portfolio of a Collective Investment Scheme This is an arrangement that enables investors to pool their money and have it professionally managed and invested in a range of underlying assets. The underlying assets of a Portfolio vary depending on the Portfolios investment objective. Portfolio are commonly referred to as `unit trust(s) or `fund(s). In this document the term `unit trust is used. Participatory interest in a Portfolio of a Collective Investment Scheme A Portfolio of a Collective Investment Scheme is divided into equal parts, also referred to as `units. Each unit represents a direct proportionate interest in every underlying asset of the Portfolio. The number of units that are held for your benet depends on how much money you contribute and what the unit price is when units are bought. Manager The company that administers the Portfolio(s) of a Collective Investment Scheme in terms of the Collective Investment Scheme Control Act. Allan Gray Unit Trust Management (RF) Proprietary Limited is an example of a Manager. Allan Gray Nominees This is the independent company approved by the Financial Services Board that holds the assets in trust Allan Gray Nominees (Pty) Limited Policy Year The year starting on one Anniversary, and which runs until the Anniversary date the following year. Anniversary The anniversary of the date on which the policy originally started. If the policy resulted from a transfer, the anniversary date will be the same as before the transfer. Beneciary The party you nominate to receive the benet under the policy on your death. Business Day A business day is any day other than a Saturday, Sunday or South African public holiday. In this document day and business day have the same meaning.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
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Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
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f. How does the Investment Account work? You must choose any one or a combination of the unit trusts made available by Allan Gray Life as the underlying investments of your Investment Account. The value of the Investment Account is directly linked to the market value of the underlying investments and is not guaranteed (i.e. may move up and down). The value of the Investment Account is increased by the amount you contribute to the policy and positive investment returns. Allan Gray Life re-invests all dividends and interest earned in the unit trust. The value of the Investment Account is reduced by negative investment returns, Annuity Income payments and any relevant fees and charges. The underlying investments of the Investment Account are owned by Allan Gray Life and you have no right to the underlying investments held under the Allan Gray Living Annuity. The investments are held via a nominee company Allan Gray Nominees (Pty) Limited. Past performance of the underlying investments is not necessarily a guide to the future. You carry the risk of the market value of the unit trusts underlying the Investment Account being reduced. g. When does your Allan Gray Living Annuity start? Your policy starts after the Administrator has received and accepted your application, including all supporting documents on behalf of Allan Gray Life, and the money is invested. h. When does your Allan Gray Living Annuity end? Your Policy will cease on your death or until you transfer to another long-term insurer. If the total market value of the unit trusts in the Investment Account is less than the amount prescribed by the regulatory authorities or legislation, such an amount, less relevant fees and charges, may be withdrawn by you. Allan Gray may request that you withdraw this amount. Your policy will terminate when this happens. i. What is the tax treatment of the Allan Gray Living Annuity? In terms of current legislation the investment returns (capital growth, interest and dividends) of the Allan Gray Living Annuity are not taxed. However, all your Annuity Income as well as any cash lump sum amounts commuted by you, or a beneciary after your death, will be taxed in line with South African Revenue Service (SARS) requirements.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Which documents form the basis of your agreement with Allan Gray Life?
Your Living Annuity policy with Allan Gray Life is based on the application form, supporting documentation that you provide, the Policy Summary and this document. All other instructions which you provide and which Allan Gray Life and /or the administrator accepts will also form part of the agreement.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
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Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
j. Change your Annuity Income annually On each Anniversary you may change your Annuity Income and payment frequency within the limits as determined by the regulatory authority and/ or legislation. k. Nominate Beneciaries You may nominate one or more Beneciary(s) and indicate the proportion in which they are to share the proceeds. The nomination must comply with the Administrators requirements. Where there is more than one Beneciary, they will share on an equal basis, unless you direct otherwise. Your nomination will have no effect if your Beneciary(ies) dies before you. Where applicable, a deceased Beneciarys share shall pass to the surviving Beneciaries in equal shares. Your Beneciary(ies) has no right to any benet under the policy while you are alive. The Administrator must receive any nomination or changes to this in writing at its head ofce while you are still alive. You need to keep your nomination(s) up to date. l. Transfer to another long-term insurer You may request a transfer to another long-term insurer to purchase another compulsory annuity in your name. The transfer is subject to the requirements of Allan Gray Life, the regulatory authorities and the insurer that you are transferring to. Where cash is transferred, the amount will be determined once the units of the underlying investments of the Investment Account are sold and the applicable fees and charges are deducted. Where a transfer of units is requested, the underlying units of your Investment Account will be transferred to your investment account held with the insurer you are transferring to, after the applicable fees and charges are deducted. m. Cash in the policy (Withdraw all your money) You may request that the full market value of the Policy be paid to you as a lump sum if the value is less than an amount set out in legislation. n. Report errors You have 14 days after receipt of the investment conrmation or any statement to report any errors to the Administrator. o. Notify the Administrator of changes in bank or contact details You need to inform the Administrator of any changes in your bank or contact details, including your postal and email address, and provide supporting documentation where appropriate.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
What can Allan Gray Life do that will affect your Policy?
a. Review and amend your Annuity Income Allan Gray Life may adjust your Annuity Income level if required by legislation or any directives issued by the regulatory authorities. If you chose a percentage and fail to request a change of the percentage of your Annuity Income at Anniversary, Allan Gray Life may adjust your Annuity Income based on your existing percentage on record and the market value of your Investment Account. b. Remove underlying investment options If for any reason a unit trust is no longer available, Allan Gray Life will give you written notice. Allan Gray Life will ask you to select an alternative from the list of available investment options. if you do not select another investment option within the time period given by Allan Gray Life, Allan Gray Life will switch your investment from the affected unit trust to the Allan Gray Money Market Fund. c. Change your selected unit trust(s) Allan Gray Life may change your chosen unit trust(s). This will happen if Allan Gray Life breaches the investment limits set by regulatory authorities applicable to Allan Gray Life. An example of these limits is that only a certain percentage of Allan Gray Lifes assets may be invested offshore. d. Amend the terms and conditions Allan Gray Life may amend the terms and conditions of the Allan Gray Living Annuity. Please contact your nancial adviser, the Client Service Centre on 0860 000 654 or www.allangray.co.za for the latest version of these. Allan Gray Life may not reduce the rights and benets that you have under the policy, except where the amendment is due to a change in: taxation; legislation; the practice or interpretation by any court, legislative or regulatory authority or Allan Gray Life.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Day 4
For certain unit trusts there will be an additional business day for the units to show on your Allan Gray statement. It is noted on the Allan Gray Investment Platform fund list when and where this applies. When you make a withdrawal, the selling of the units will show on your quarterly statement within four days, but it may take longer for the income payment to show in your bank account. 2. Switching unit trusts administered by different Managers The Administrator receives money from the Manager Day 4 The Administrator pays the money to the new Manager Day 4
Administrator sells units Day 2 The price at the close of Day 2 Day 3 The price at the close of Day 3
Manager buys units Day 4 The price at the close of Day 4 Day 5 The price at the close of Day 5
Day 1
Day 5
Day 2
Day 5
Day 5
Day 6
Transactions that require a sale of the underlying investments will normally take a maximum of seven business days to process. For certain unit trusts there will be an additional business day for the units to show on your statement.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
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Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
3. Phase-ins Phase-ins are scheduled on the 5th of every month. If the 5th is not a business day it will take place on the next day. The Administrator needs to receive the instruction by 14:00 5 days before the scheduled phase-in day. Any instructions received after the cut-off date will be processed the following month. 4. Processing sequence of multiple instructions If the Administrator receives an instruction while another instruction is in progress, the second instruction may be delayed until the rst is complete. 5. Annuity Income Payments We will pay your Annuity Income by the 27th of the month. It may take up to two days to reect in your bank account. If the 27th falls on a weekend or public holiday we will pay your Annuity Income the previous business day. After the rst payment date quarterly and biannually advance payments will be made every three or six months, respectively. You may select to have a specic fund pay your Annuity Income. If that fund is depleted Allan Gray will sell units across all unexhausted funds proportionately to make provision for the Annuity Income. If you are a new investor or are notifying us of a change in your Annuity Income the Administrator needs to receive your instruction by 14:00 six business days prior to the 27th of your Anniversary month. Certain unit trusts require an additional business days notice. If you miss the cut-off time the change to your Annuity Income payment will be delayed by a month. e. Allocate bank interest earned Bank interest (at the rate earned in the Allan Gray Living Annuity bank account on lump sum contributions) will be applied to the lump sum amount deposited if it takes longer than 24 hours to start processing the payment received. f. Professional indemnity and delity insurance cover The Administrator and Allan Gray Life are insured against fraud, negligent or dishonest behaviour. g. Reinvest income distributions Any income distributions made within a unit trust will be re-invested automatically. h. Accept or reject instructions The Administrator may accept or reject your application or subsequent instructions on behalf of Allan Gray Life. The Administrator may also reverse a transaction on behalf of Allan Gray Life, if the circumstances justify it.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
What are Allan Gray Life and the Administrator not responsible for?
a. Advice Neither Allan Gray Life nor the Administrator give advice. They do not employ nancial advisers. b. Certain losses suffered Neither Allan Gray Life nor the Administrator are responsible for any losses that may be suffered due to: errors made by the Manager of a unit trust; the investment or market risk of the underlying investments; changes in tax or other legislation; delays in the processing or the rejection of an application because the nancial adviser is either not an authorised Financial Services Provider or does not have a contract with the Administrator; nancial advisers acting beyond the scope of their FSB license; unauthorised instructions given by the nancial adviser; the failure of any networks or electronic or mechanical devices; the Administrator or Allan Gray Life providing your appointed nancial adviser with details about your investment either via telephone, email, fax or a secure website. the Administrator or Allan Gray Life acting on information sent electronically; the Administrator or Allan Gray Life acting on incorrect information where you have failed to notify them of any changes to such information; the delayed sale of units in a unit trust due to ring-fencing: Ring-fencing is the separation and delayed sale of units in a unit trust. Large sale of units above a certain threshold in a unit trust may cause ring-fencing. This ensures that the sale of a large number of units will not force the Manager to sell the underlying investments at a price in the market which could have a negative impact on investors. Allan Gray Life may delay the payment or reinvestment of the proceeds of the sale of units. c. Delays in processing instructions The Administrator will carry out instructions at the earliest possible opportunity, subject to its administration procedures and any unit trust limitations, at the time of the transaction. Neither the Administrator, nor Allan Gray Life accepts responsibility for delays in processing instructions as a result of extraordinary events that cause disruptions.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
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Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
iii) Financial adviser fee You and your nancial adviser may agree on annual nancial adviser fees (as indicated in the application form or any other written communication acceptable to the Administrator). Depending on the class of your chosen unit trust, an amount equal to the nancial adviser fees is either: a. Deducted by selling units from the unit trusts underlying the Investment Account. Allan Gray Life will pay the Administrator this amount (which accrues to the Administrator) as an annual administration fee, in addition to the administration fee in (i) above. The Administrator will pay an equal amount to the nancial adviser monthly in arrears; or b. Included in the published unit price of the unit trust. The Manager pays this fee directly to the nancial adviser, or to the Administrator who pays the nancial adviser. c. Other fees i) Termination fee Allan Gray Life does not charge a fee when proceeds are paid. ii) Unit trust exit fee If the Manager of your chosen unit trust charges Allan Gray Life an exit fee, the proceeds of the sale of any units will be reduced by the exit fee. iii) Unit trust switching fee Allan Gray Life does not currently charge a switching fee when you request a switch from one unit trust to another. However, because a switch is made up of a sale and a purchase of units, the Managers may charge unit trust initial and exit fees. d. Value added tax (VAT) Where VAT is levied on fees (or charges) charged to Allan Gray Life, an amount to compensate for VAT will be added to the fees (or charges) recovered from the policy. VAT may also be added to fees and charges which are not charged to Allan Gray Life directly. e. Changes in fees or charges The fees and charges that Allan Gray Life recovers from the policy may change. Allan Gray Life will also recover any new fees or charges from the policy if they are charged to Allan Gray Life. Allan Gray Life will give you three months written notice when new fees or charges are added, or when changes (excluding decreases) are made to the: initial administration fee annual administration fee unit trust switching fee termination fee Allan Gray Life may give less than three months written notice if, in its opinion, the circumstances of the change (for example a change in legislation) require it. Allan Gray Life does not have to notify you when any of the other fees or charges are changed. f. Reporting of fees The quarterly statement will indicate the applicable fees for that period.
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Contact details
a. Insurer: Allan Gray Life Limited Postal and physical addresses of the head ofce, issuing ofce and contact details of the compliance ofcer: Physical address: 2nd Floor, Block A Granger Bay Court Beach Road V&A Waterfront Cape Town 8001 Postal address: PO Box 51318 V&A Waterfront Cape Town 8002 b. Administrator: Allan Gray Investment Services Proprietary Limited Postal and physical addresses of the head ofce and contact details of the Client Service Centre: Physical address: Portswood Square Dock Road V&A Waterfront Cape Town 8001 Postal address: PO Box 51605 V&A Waterfront Cape Town 8002 Tel: 0860 000 654 or +27 (0)21 415 2301 Fax: 0860 000 655 or +27 (0)21 415 2492 Email: info@allangray.co.za Website: www.allangray.co.za
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013
Denitions How does the Allan Gray Living Annuity work? Which documents form the basis of your agreement with Allan Gray Life? What are your rights and responsibilities? What does not apply to your Policy? What are the responsibilities of Allan Gray Life? What can Allan Gray Life do that will affect your Policy? What are the Administrators rights and responsibilities ? What are Allan Gray Life and the Administrator not responsible for? What happens following your death? What fees and charges do you pay? What legislation and regulations govern this agreement? Contact details Complaints
Complaints
a. Compliance ofcer: Allan Gray Life If you are not satised with this policy or the service of the Administrator, you can write to the compliance ofcer at the Allan Gray Life address given above. Remember to include all supporting documents. The compliance ofcer will acknowledge the complaint in writing, and provide you with the contact details of the person that is most likely to resolve it. Postal address: Compliance Ofcer PO Box 51605 V&A Waterfront Cape Town 8002 b. Ombudsman for Long-term Insurance If you are not satised with the response, you can contact the Ombudsman for Long-term Insurance at: Postal address: The Long-term Insurance Ombudsman Private Bag X45 Claremont 7735 Tel: (021) 657-5000 Sharecall: 0860 103 236 Fax: (021) 674-0951 c. Ombud for Financial Services Providers If you have a complaint about the Administrator or advice given by a nancial adviser relating to this policy, you can write to the Ombud for Financial Service Providers at: Postal address: The Ombud for Financial Services Providers PO Box 74571 Lynnwood Ridge 0040 Toll-free: 0860 324 766 Email: info@faisombud.co.za
Allan Gray Proprietary Limited is an authorised nancial services provider. Version 9.2 August 2013