Interest on Trust account balances
Any funds you deposit with us and will be held in FinClear’s Third Party Clearer’s Trust Account for limited periods, usually very short periods and the Third Party Clearer is entitled to the interest earned on Trust Account balances.
More About Our Advisory Services
‘Advisory services’ means recommendations or opinion, whether in written or report form or provided verbally, that are intended to influence a person in making an investment decision. ‘Advice’ falls within one of two categories: either General or Personal advice.
Personal advice is advice given to a person in circumstances where consideration has been given to whether the product is personally suitable in light of what is known about one or more of the person’s objectives, financial situation and needs, or where it might reasonably be expected one or more of those matters has been considered. General advice is strictly limited to an assessment of the investment and/or other merits of the product itself (see section 0 below).
FinEx will only provide General or Product Advice. FinEx will never provide Personal Advice to you.
Your FSP has engaged FinEx to provide execution services and to arrange for the distribution of research. The fact that you may see our product advice (e.g. research) does not mean we are providing advice tailored to you personally or that we have an ongoing advisory service relationship with you directly. Your FSP has that role and responsibility.
What are the limitations of research, newsletters and other opinions we provide?
Research and other product advice presents the opinion of specialist analysts. The assumptions on which that opinion is based mean that forecast performance cannot be guaranteed. Past performance is not a reliable indicator of future investment performance. A recommendation or rating may only be valid for a limited time and is often subject to movements in market price. Just because you see that a product is recommended or rated in a report or a newsletter as a 'buy', 'sell', 'hold', 'accumulate', 'underweight', 'overweight', 'neutral', 'out-perform' or 'under-perform' does not mean that recommendation is appropriate for you specifically. You must consult your FSP before acting on any report or recommendation presented in a newsletter.
Product Advice - General Advice
Product advice is a rating or assessment based solely on the attributes of the financial product, the portfolio or investment strategy alone without considering whether it is also appropriate for someone’s financial circumstances. Product advice is considered to be General Advice.
Product advice includes research reports and newsletters. FinEx has entered into a commercial arrangement with Lonsec Research Pty Ltd (Lonsec Research) for Lonsec Research to supply FinEx with research reports. FinEx may make these available to your FSPs. You must not assume that the research reports or research recommendations or ratings distributed by FinEx research are appropriate for you personally. The process of profiling a client’s circumstances and objectives is not relevant in relation to product advice. Product advice may be derived from fundamental analysis (i.e. analysis of financial reports) or technical analysis (patterns in market trading and price-movement behaviour). Product advice will be accompanied by the warning that the advice is not a recommendation that a particular transaction is personally appropriate for any particular person, and that you will need to consider (guided by your FSP) whether acting on the advice is appropriate in light of your financial circumstances. If a PDS is relevant for the Financial Services Guide product recommendation, the warning will also highlight the need, before making a decision to invest, to ensure you read and carefully consider the PDS.
Model Portfolio Services
Under the arrangement with Lonsec Research, FinEx also has access to Model Portfolios that have been developed and maintained by Lonsec Research. Your FSP may determine that a direct investment in a portfolio of market traded products would be appropriate as part of your overall financial plan, and request FinEx to arrange a portfolio to a particular value based on one of the Model Portfolios developed by Lonsec Research There are a number of notional Model Portfolios, each having different collective investment/risk characteristics. The portfolio proposal prepared for your FSP is general product advice. It is based solely on the investment merits of the Model Portfolio selected, and the shares or other products making up the particular portfolio. Even though FinEx is asked to propose a portfolio to a particular value, and to give a view on your existing holdings (if any), our advice remains limited to product advice. Whether the proposed portfolio is suitable for you personally is entirely the responsibility of your FSP. If you see the proposal, it will usually be supporting your FSP’s Statement of Advice to you.
The Model Portfolios that FinEx has access to reflect an active investment philosophy, focusing on generating absolute returns over the medium to long-term by means of concentrated portfolios. FinEx Lonsec Research (the entity that developed the model portfolios) uses a four-step investment process, which has a strong focus on ‘top-down’ macro- economic (step 1) and sector themes (step 2). The third-step applies a number of filters (i.e. industry ratings, issuer quality, valuation of issuer, issuer’s risk rating) to facilitate stock selection. The fourth step is the on-going monitoring of the Model Portfolio. If we change stocks in a Model Portfolio, we advise your FSP and your FSP will review your portfolio accordingly.
Personal advice recommends a product as being appropriate for a client personally, following consideration of their personal financial circumstances and investment objectives. Your FSP, not FinEx, will provide this category of advice. A Statement of Advice is only relevant in the context of personal advice, not product advice. You will never receive Statement of Advice from FinEx.
For clients considering FinEx’s MDA service please refer to its Supplementary FSG dated 1 April 2017.