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This document defines how we differ from other financial service
providers. Herein you will find a definition of our service charter,
a matrix of service attributes and a more detailed description of
our scope of service than that provided in our Financial Services
Guide.
Our Service Charter
Our charter as a service facilitator is to seek out, develop and
deliver the most appropriate, affordable services, products and
resources for our clients.
In our continual search for improvements in service and efficiency
we strive to reduce our cost of service and apply the resultant
savings and resources to:
- Make services more affordable and accessible to a broader
range of clients;
- Offer the by-products of our development programs to all
clients;
- Maintain a flexible set of modular services for clients to
select from; and
- Fund further improvements to our range of services.
How do clients benefit?
Clients are provided with a greater variety of choices at an
affordable price. We continue to seek out the most affordable
components to ensure that we remain price competitive. Clients can
be assured that they are receiving genuine value for money, as our
philosophy is to minimise overheads, without compromising on
quality.
We believe that we have constructed a comprehensive and economical
service framework through our comparative evaluation of systems,
information, suppliers and various resources.
Existing Clients
Existing clients can be confident that we will not become
complacent. Our clients will continue to benefit from the
improvements that we develop. Their loyalty to the business is
rewarded with consistent quality of service, competitive prices,
continual service improvements and progressive access to
complementary services.
Our commitment to quality and value involves listening to clients to
understand which services and attributes provide the greatest value
to them, and we set our service priorities accordingly.
Prospective Clients
Our modular structure allows clients to subscribe to some, many, or
all of our services. You can simply mix and match elements to suit
your needs.
New clients can access a level of service and resources that might
otherwise be beyond their means, or at least more expensive.
Services are packaged at reduced prices to pass on savings to our
clients.
Economic savings result from common administration and standard
procedures, by removing redundant tasks and streamlining
communications. Consequently, the more of our services a client
uses, the more economical it becomes.
Through our investigation of various systems, support services and
advisory resources we have developed a generic investment model and
selected a set of resources that support that model. This model can
be employed by professional advisors and DIY investors alike. Simply
select the level of service required.
Competitors & Alternatives
We expect that others will attempt to duplicate our innovations. The
difference is that we possess the necessary skills not only to
identify opportunities, but also to implement them. But what really
sets us apart is that we will not rest. We will maintain a budget
for innovation and constantly strive for improvement so that our
clients can be confident that our services will stay ahead of our
competitors in terms of value and quality.
Most boutique financial service providers pursue only the ideal
client type - often described as the “high income, wealth
accumulator”. They show little interest in attracting the average
person as a client.
The reason for this selectivity is that:
- Most service providers do not plan or budget for service,
process and product innovation. They do not recognise the
benefits of planning for innovation.
- Many rely on commissions or volume-based fees to earn their
revenue and generally, the bigger the portfolio value, the
bigger their income. So smaller investors are less profitable to
them.
- It’s easier to charge higher fees than to find ways to
reduce the cost of service. Most service providers are content
to “re-package” their existing services, than adopt new methods.
- Higher income earners are more willing to pay for “bells and
whistles” that they may not need.
We believe that many services and resources can be extended to a
broader range of clients at a reasonable cost. The fundamental
resources required for a full-service offering can be leveraged to
deliver different levels of service, including:
- Discount services by bundling them into packages;
- “Budget” grade services, such as limited scope of advice;
- Educational resources – newsletters, seminars, calculators,
internet access; and
- Do-It-Yourself (DIY), general advice or non-advisory
resources.
An example of how we provide added value to our clients is the
provision of resources that enable effective DIY investment
implementation and monitoring - tools for research, trading and
administration. The fruits of our research provide our clients with
helpful information on alternatives. The task of identifying and
evaluating these various resources would take an individual many
hours of effort.
Our core resources for investment implementation and monitoring are
offered to investors as modular service components to allow them to
perform the research, trading and administration themselves.
DIY clients also have the option to UPGRADE their services to DIY
Plus, or full service at any stage.
Our general principle is not to try to “reinvent the wheel”, but to
utilise the most valuable elements of available resources to deliver
a comprehensive and economical composite service.
By leveraging resources that are not directly accessible to retail
investors, we can provide a set of services with greater:
- Reliability;
- Variety;
- Convenience;
- Flexibility; and
- Affordability.
See the Service Matrix and Do-It-Yourself sections below for further
details of the services. Refer to our Schedule of Fees to identify
the service level that’s most appropriate to your needs.
Specific Service Features
The following subsections define the features included within the
various service packages. Although the most economical option is to
subscribe to the “Full” service package, clients can select a
sub-set of services in any combination of components. If the
combination you want is not shown below, then please ask one of our
advisors to quote the cost for you.
Subscription Engagement
The standard Subscription Engagement process includes:
- Registering clients for internet access, newsletters,
scheduled reports and administration.
- Establishing accounts for trading, administration and record
management.
- Preparation and Lodgement of product applications and
related administration.
Core Subscription – Ongoing Monitoring &
Review
The standard (core) service components included in all subscription
packages are:
- Internet access to personal account details.
- Internet, e-mail and fax access to trading of Australian
shares, listed securities and managed funds.
- Internet, e-mail, fax and postal access to extensive
research information from multiple sources. See the WERCS
section for a detailed description.
- Internet access to portfolio holdings and reports such as:
- comprehensive portfolio valuations;
- income reports (including franking, imputation credits);
- realised & unrealised capital gains reports;
- investment performance reports.
- Quarterly Newsletters distributed via internet, e-mail, fax
or post.
Full and DIY-Plus Packages
The following items are only included in the Full and DIY-Plus
service packages.
- Quarterly portfolio snapshots and consolidated reports via
e-mail, fax or post.
- Data entry of financial transactions, income and expenses.
- Electronic CD-ROM archive and records of all documents
(Statements, Invoices, Reports etc.). This safeguards the
information and can alleviate the need for paper copy storage.
- Annual Taxation Return Preparation and Lodgement *. For
conditions, please read “SCOPE OF FIXED-FEE TAX SERVICE” below.
Full Service Review Formal Review of an investment strategy is
only included in the Full service package.
- Quarterly Portfolio Review to re-balance investments if
necessary.
- Annual formal review of financial position, including:
- changes to investment strategies,
- debt consolidation or mortgage rate reductions;
- tax minimisation; and
- refinement of previous recommendations.
Scope Of Fixed-Fee Tax Service
The standard Fixed-Fee Tax Service is limited to the scope listed
below. Variations beyond this scope are assessed to determine if any
additional fee is warranted and the added costs quoted, at discount
rates, for your consideration. The standard scope for the
preparation and lodgement of taxation returns is:
- An individual, resident PAYG Salary or Wage earner.
Subscribers can obtain discounted tax services for related
entities (companies, trusts, partnerships and self-managed super
funds).
- Additional members of clients’ immediate family who satisfy
these criteria can also obtain the same tax service for an
additional, fixed-fee per person of $100 (plus GST).
- Up to 3 bank accounts (Cash/CMT, Savings & Cheque).
- 1 credit card (deductible work/business expenses).
- 1 share trading account (CHESS Broker Sponsored), multiple
listed holdings.
- 1 equity margin loan account.
- Up to 5 investment accounts (distinct wraps, master trusts,
savings plans, managed funds).
- Up to 3 investment properties (the advisor assists to
prepare depreciation schedules).
PLUS Upon subscription the client must ensure that we receive a copy
of all statements relating to all relevant assets, liabilities and
related transactions to enable progressive recording of
transactions. Our administration team manages account postal address
registration appropriately.
We electronically archive documents and can forward the originals to
clients.
The simplest means of achieving this is to request that institutions
(banks, brokers, fund managers, insurers) register our contact
details (available from the contact us page) as an additional
mailing address for document duplicates.
Our preferred form of correspondence in all instances is electronic
mail (e-mail). Where an institution is unable to send copies of the
relevant documents, the alternative process is one of:
- Register our Client Services address (available from the
contact us page) as the postal address for the respective
accounts and our Client Services department can copy the
documents and forward the original to clients’ mailing address
within 2 business days of receiving them.
- Upon receipt of each document send a copy to our Client
Services department and retain the original document until the
annual CD-ROM archive is received (as part of the annual
review).
NOTE: This process can deliver great savings and benefits to
clients, our natural resources and environment. Our unique document
processing services help to reduce paper use and physical storage.
The process ensures the timely and accurate recording of
information, while saving time, space and trees.
For more details please refer to the Services page on our web site,
or ask us for a copy of our service agreement. Your advisor is happy
to answer any questions you may have.
Ad hoc services
Quotes for ad hoc, individual and related services are available
upon request. Our standard Fee Schedule indicates the hourly charge
rate for professional services.
Do-It-Yourself (DIY)
In essence, the generic process of investing is the same whether you
are an advisor, or an individual “doing it yourself”. The difference
between these two types of investors is generally the different
levels of tools, resources, training and experience and the time
available to focus on the process. Professional advisors are paid to
spend their days maintaining their skills and researching broader
strategies for financial management. Occasionally people prefer to
perform some, or all of their investment activities personally,
rather than employ a financial manager, or utilise managed/pooled
investment vehicles.
Their reasons for doing so often vary, but may include:
- The monetary cost of a DIY approach can be lower;
- Individuals may desire more frequent contact or level of
service that exceeds advisor capacity; and
- Hence, some believe that DIY gives them a greater degree of
control.
However such reasoning may be misguided as there are drawbacks in
performing activities yourself.
For example,
- Limits on one’s ability to keep informed of changes in the
products, economy and legislation;
- Non-professionals are generally more reactive, than
proactive and could miss some opportunities;
- Difficulty accessing the quality of research and expert
advice that professional advisers use;
- Limited access, or increased lead-time for ad hoc advisory
or administrative support;
- Limited access to discount transactions (brokerage,
reporting, tax returns);
- Limited access to Initial Public Offerings (IPO/floats);
- Increased costs and complexity for administration services
(eg. tax returns);
- Inability to properly assess the impact of investment
decision on one’s tax obligations, right to social security,
estate value and basic legal implications.
Our DIY service packages helps to overcome those drawbacks.
DIY investors should be confident in their ability to:
- commit sufficient time to read the necessary research
information (in summary form at least);
- monitor their investments diligently; and
- act promptly to respond to changes in products, prices,
markets and their own circumstances.
If an investor has such confidence and is willing to bypass the
review, analysis, strategy definition and plan development stages of
the investment process, then our DIY service packages enables them
to perform various core investment tasks personally. Investor
classification is usually done by an advisor conducting detailed
review and analysis. For DIY investors that task falls upon the
investor him or her self.
Having determined the classification, the investor then performs the
following tasks:
- Identify a suitable portfolio profile to match the
investor’s objectives and risk tolerance.
- Utilise research information to recommend individual
products to fill the portfolio profile.
- Apply appropriate systems to trade in financial products.
- Regularly monitor the performance of the selected products
and read research information to ensure that the portfolio
remains consistent with the profile adopted in step 1 above.
- Where a change in overall strategy is required, then an
advisor should be consulted.
- If the change relates to individual products, then
repeat step 2 with respect to those products.
- Satisfy legislative requirements for reporting income and
capital gains.
The resources related to these elements are provided in our DIY
service packages. They include:
- Formal, introductory investment process instruction and
training.
- Expert recommendations defining “Model Portfolios”.
- Access to a broad range or detailed research and
recommendations from expert analysts.
- Broker trading account facilitating purchases and sales.
- Portfolio reporting, news and alerts to monitor holdings.
- Administration facilities to assist in preparing taxation
returns.
Why use our DIY Basic package?
DIY investors may question why they shouldn’t just open an E-trade
Standard account and simply rely on the trading tools and research
provided with that service. That approach would provide the cheapest
DIY environment for those on a very limited budget. However, one
should consider that the cost of our DIY Basic subscription is
relatively inexpensive and delivers several valuable resources that
aren’t provided by E-trade Standard. The fees are also likely to be
tax-deductible, thus making them quite affordable[1].
Additional benefits and resources that DIY Basic provides beyond
those of E-trade Standard include:
- Up to 25% discount on brokerage rates (reduced from $32.95
to $24.50 per trade).
- Instructional tutorial in our Investment Process.
- This teaches investors to use the various DIY resources
to apply the investment process.
- Extended set of independent research. Access up to 4
separate providers and dozens of analysts’ recommendations in a
summary format - see the WERCS Report section below.
- Detailed analyst reports for selected shares (alternate
providers limit the level of detail).
The Basic DIY service provides the resources for an investor to
perform all of their trading and administration. Coupled with the
introductory training, it equips DIY investors with the necessary
research information, trading tools and support to manage their own
portfolio. Put simply, DIY Basic gives the DIY investor the
resources to manage their affairs the same way as professionals do.
The DIY package is essentially a GENERAL ADVICE service. The
resources and advice provided does not take account of subscribers’
individual objectives and needs. DIY Basic investors conduct their
own detailed needs and risk tolerance analysis.
Subscribers can easily upgrade services if they subsequently find
they want personal advice or extra components. For example, if they
find the effort to manage the portfolio exceed initial expectations.
Subscribers access a resource unique to us – the Weighted Equity
Research Consensus Summary (WERCS) report. WERCS saves clients a
great deal of time by summarising the recommendations and statistics
from several research sources in a single concise report. Thus the
WERCS report delivers a broad range of recommendations “at a
glance”. Clients have the ability to review the research detail that
underlies the report.
The package delivers a significant cost saving compared with direct
purchase of equivalent resources. It simplifies the investment
process for investors by consolidating services and information,
summarising recommendations and reporting exceptions to deliver
timely, relevant support for trading decisions. Without such
summaries, an investor would need to subscribe to many research
providers and read detailed reports from each of them. WERCS
provides quality research information in a form that saves time and
money. The DIY resource table below illustrates how costly and
complex it would be for an individual investor to obtain those
services and resources directly.
While a DIY investor might not be expected to perform as well as a
professional advisor, the process provides a method that enables the
investor to improve their chances of success. Applying expert
analysts’ recommendations to a formal framework promotes discipline
and knowledge. Having it presented in the form of the WERCS Report
makes it easier to apply that knowledge and discipline.
Our team of analysts has compiled what we believe is the most
cost-effective, comprehensive set of resources. Other resource
combinations may achieve a similar framework, but at a higher cost.
These resources equip DIY investors with the same resources that
professionals use. Coupling those resources with the support and
structure of our DIY framework enables our clients to maximise their
chances of success with minimal cost and effort.
Why upgrade to the DIY Plus package?
DIY Plus provides extended GENERAL ADVICE, resources and support
services. Added components in DIY Plus help to reduce the effort
required to manage an investment portfolio. Extended exception
reporting and notification enhances investors’ ability to remain
up-to-date with the latest changes.
The extended services are listed within the matrix above and the
main benefits of upgrading are:
- Clients can submit orders and correspond without needing
internet access – post, e-mail, fax.
- Assistance in analysis for Investor Classification and Model
Portfolio selection.
- Client Services perform key administrative tasks and data
entry to reduce clients’ workload.
- Considerable discount on preparation & lodgement of annual
tax returns for immediate family.
How important is it to have multiple
research providers?
When it comes to investments, the more information one has available
to assist in making decisions, the better. But it needs to be
reliable information. More often than not, verification of a
recommendation via a second, or third opinion helps to further
qualify that recommendation.
Theoretically, having a broader set of independent recommendations
should reduce the effects of any bias or anomaly resulting from:
- research limitations,
- limits to the precision of statistical valuation techniques,
and
- diminished objectivity due to commercial interests and
influences.
Having multiple conflicting recommendations can cause confusion and
uncertainty. Reviewing multiple recommendations in their raw form
would involve considerable time and effort. Using a quantitative
approach to evaluate each in a summary can reduce the uncertainty,
while saving time and effort.
Meaningful summaries can be produced by assessing each provider’s
recommendations in terms of their:
- frequency and scope of coverage (number of products covered
and how often),
- quality of the analysis (how often does the analyst “get it
right”),
- independence (the analyst or their employer holds no
interest in the recommended product), and
- scope of influence (how many investor are likely to follow
the recommendations).
Timely access to information used by advisers puts an investor among
market leaders, rather than following them. Trade volume stemming
from significant acceptance of a recommendation can make it
self-fulfilling due to impacts on supply and demand. Our WERCS
Report helps forecast the actions of the majority (volume). Such
composite forecasts can be invaluable, as illustrated by the graph
below.
DIY Resource Comparison
Click on the following link to see a table that shows the various
resource attributes that make up our DIY toolset.
Click here to view the table
Please direct any questions or queries to
one of our advisors, or authorised representatives.
Disclaimer of warranties
All material published is provided in good faith. It is believed to
be accurate and current as at the date of publication, with a bona
fide expectation that the source of the material is both current and
reliable. Your use of the information is at your sole risk. We will
not be liable for loss resulting from any action or decision by you
in reliance on the information, nor any interruption, delay in
operation or transmission, virus, communications failure, Internet
access difficulties, or malfunction in equipment or software
resulting from any action or decision by you.
Us, our related bodies corporate, directors and employees make no
representation or warranty that any published material will remain
reliable, accurate or complete over time. Nor do they accept any
responsibility arising in any way for errors in, or omissions from
that material.
Not to be considered advice - General reference only
Unless specifically published as a formal Statement of Advice, all
material we provide is for general reference only. It is not to be
taken as advice. You should seek formal, specific advice from one of
our authorised representative to ensure that any advice is tailored
to your specific circumstances prior to making any decisions.
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