What about the Matter of “Investment Risk”?
In general, all investments have associated risks and in most cases, the higher the return, the higher the risk to your investment.
By ‘risk’ we mean the possibility that you will suffer some financial harm by investing. Your preparedness and capacity to carry a particular level or type(s) of risk in pursuit of your investment strategy is a fundamental element of your financial circumstances.
Risk should be considered when developing or reviewing your overall investment and wealth-creation strategy and this is a matter for you and your FSP to discuss in detail
FinEx Remuneration And Benefits
How are we remunerated and what other benefits might we receive for the services we provide?
FinEx may be paid in one or any combination of the following ways:
▪ FinEx is remunerated by the fees it charges your FSP. The fees that it charges your FSP is transaction based and is a fee per trade. This fee is negotiated between your FSP and FinEx and will be passed on to you. For every transaction you enter into you will be charged a brokerage fee that is determined by your FSP and this brokerage fee will include the fee that FinEx charges your FSP and may also include the fee that your FSP charges. FinEx’s Third Party Clearer will collect the brokerage and remit this brokerage to FinEx (less their fees) and FinEx will then remit this to your FSP less the fees that is payable by the FSP to FinEx;
▪ FinEx will also charge a Management Fee on any Managed Account portfolios;
▪ We may be paid by the financial product issuer after you invest or contract;
▪ In special circumstances, we may receive performance based fees; or
GST is payable on all our charges.
How are our dealers and other staff remunerated?
FinEx’s directors and staff (including its dealers) receive a salary. Directors and staff may also receive other benefits such as bonuses. They do not receive a proportion of the fees, charges or commissions you pay.
The range of our transactional charges
Brokerage on each purchase or sale on a relevant exchange or foreign market is calculated as a percentage of the dollar value of the transaction, subject to an agreed flat minimum fee. The total Brokerage you will pay on a transaction is set by your FSP but this will include the negotiated execution fee that FinEx has negotiated with your FSP.
You should refer to your FSP’s FSG for disclosure relating to the fees imposed by your FSP. For a purchase, the total brokerage (which includes FinEx’s fee and any brokerage your FSP may charge), together with any applicable duty or tax, is added to the transaction value and the total is the overall consideration payable by you. If payment in full is not received by the time and date shown on the Confirmation, you may be charged an administration fee (refer attached Schedule of Fees) or, ultimately, the holding may be sold-out in the market at your risk and expense. For a sale, the total brokerage (which includes FinEx’s fee and any brokerage your FSP may charge, together with any duty or tax payable, is deducted from the proceeds of your sale transaction. You may also be charged 'fail fees' (refer attached Schedule of Fees) if you fail to settle a sale by the time and date shown on the Confirmation. Ultimately, the unsettled position may be bought-back at your risk and expense.
All these amounts (except Fail Fees) are specified on the Confirmation sent to you.
Brokerage on transactions traded on ASX markets
The standard brokerage rates for transacting ASX traded financial products are set by your FSP and a guide is found in the attached Schedule of Fees. CHESS Sponsorship fees are also detailed in the attached Schedule. We do not charge to sponsor your holdings, but we do charge for certain transfers other than those relating to settlement of on market transactions. Brokerage on transactions NOT traded on ASX markets We can arrange transactions in products other than ASX traded products (e.g. fixed income securities) with specialists in the relevant product. Brokerage will be negotiated with your FSP prior to accepting the order instructions. The method of calculating the brokerage is the same as described above. Duties and taxes may not be payable depending on the product. See the attached Schedule.
Brokerage on International transactions
For transactions on a foreign stock exchange, the brokerage charged may also include some or all of the charges of the foreign stockbroker. Again, the methodology is the same as described above. Please refer to the attached Schedule of Fees.
Lodgment, Application, Acceptance Incentives and Trailing Commissions If you apply for financial products by way of a PDS or Disclosure Document (e.g. a Prospectus), and your application is stamped by us and is accepted, we will usually receive an application / lodgment fee from the issuer in the range of 0.5% - 3% of the value of the application.
FinEx may also receive acceptance incentives to encourage clients to accept a takeover or other offer. These range between 0.5% - 6% of the value of acceptance. FinEx may receive trailing commissions from Cash Management Trust operators or WRAP platform providers if we have placed your funds to them. Trailing Commissions range from 0.5% - 2.5% calculated on the value of the funds remaining deposited or invested, and are usually payable every quarter. All these are disclosed in the product’s PDS, Disclosure Document or by us when providing advice.
Portfolio Administration and Managed Investment Schemes
FinEx’s provides both Portfolio Administration Services (PAS) and Managed Investments Schemes (FinEx Managed Accounts) to you subject to advice provide to you via your FSP. The fees for these services are based on a percentage of the total Funds Under Management (FUM) as well as a fee for any transactions required to maintain your portfolio. The fees for providing these services will be negotiated with your FSP. Refer attached Schedule of Fees. Some FSPs have commercial arrangements with FinEx where we pay a rebate to the FSP. If such an arrangement is in place this will be detailed in your FSPs FSG.
Service FinEx’s fee for providing this service will be negotiated with your FSP. Refer attached Schedule of Fees.
FinEx may charge for specialist advice. The fee would be negotiated with your FSP before we commenced work. Refer attached Schedule of Fees. Other Benefits - interests in Financial Products that FinEx or our Dealer(s) may have
When we provide product advice, we are obliged to disclose any interest(s) our Dealer(s), FinEx or any associate has that may reasonably be capable of influencing that product advice.
Other Benefits – Underwriting, Sub-underwriting and other Corporate Fees If we act as underwriter or sub-underwriter, we will usually receive a fee in the range of 0.2% to 5.0% (i.e. up to 5% of the total funds raised). The Underwriter pays sub-underwriters from their fee. FinEx would also receive lodgment fees (as described above) for client applications. If we facilitate a successful placement, FinEx would usually receive a fee in the range of 0.2% to 5% of the funds received by the issuer.
Fees or Other Rebates or Benefits payable to Referrers
FinEx may also receive fees directly from issuers as a result of handling your IPOs, capital raisings or new issue applications. This fee may be split between your FSP and FinEx and the amount of that split is negotiated on a commercial basis between your FSP and FinEx.
Detail of remuneration and other benefits can be requested
You are entitled to ask your FSP to request detailed particulars from FinEx of the remuneration or other benefits we will receive if you use a particular service, but that request must be made within a reasonable time after you receive this FSG and before any service is provided to you. What To Do If You Have A Complaint
If you are dissatisfied with the services we’ve provided, take the following steps:
Tell your FSP and if possible put your complaint in writing. Your FSP will then contact FinEx and FinEx together with the FSP will review the complaint and Compliance Manager we will contact you and if necessary ask you to provide any relevant documentation if required. The Complaints Manager will attempt to resolve your complaint and will advise you of the steps that FinEx will take to review and address your complaint. The issues involved may be complex and subject to special regulations. We will do our best to resolve your complaint quickly and fairly. Unless you advise us that you object to us doing so, we will also keep your FSP informed on the progress of your complaint.
If we are unable to resolve your complaint to your satisfaction within 45 days of receiving it, we will advise you in writing of that outcome. If you permit, we will inform your FSP of the outcome. However, if corresponding is difficult or the matter is complex or involves third-parties, we are permitted up to 90 days to resolve your complaint. We will advise you if this longer period is required. These periods are specified by the Rules of the Financial Ombudsman Service Ltd (FOS) and they may change. FinEx is a member of FOS. If your complaint isn’t resolved to your satisfaction within the applicable period, you may then refer the matter to FOS, an ASIC authorised complaints resolution organisation for the financial services industry. You may contact FOS as follows:
GPO Box 3, Melbourne Victoria 3001
Phone Toll Free on: 1800 367 287 (Australia wide)
Fax: (03) 9621 2291
Website: www.fos.org.au Email: firstname.lastname@example.org
ASIC also has a free call info line on 1300 300 630 which you can use to make a complaint about our or your FSP’s services and to obtain information about your rights.
Professional Indemnity Insurance Cover
FinEx has in place Professional Indemnity Insurance which satisfies the requirements of Section 912B of theCorporations Act. Section 912B relates to Retail Client compensation arrangements.
In very general terms, Section 912B requires FinEx to have arrangements for compensating a Retail Client for loss or damage suffered because of breaches by FinEx, or by our representatives/employees, of obligations under Chapter 7 (‘Financial Services and Markets’) of the Corporations Act, including losses caused by negligence, fraud, dishonesty or other misconduct that amounts to a breach of Chapter 7 and gives rise to a liability to a Retail Client. Section 912B also requires our arrangements to cover our liability to a Retail Client for an award (i.e. a compensation order) made in favour of that Retail Client by the Financial Ombudsman Service Ltd (see Section L), an ASIC approved External Dispute Resolution Scheme of which we are a member. The Professional Indemnity Insurance we have in place will cover claims in relation to the conduct of representatives / employees who no longer work for FinEx, but who did at the time of the relevant conduct.
Your personal information will be used for establishing and maintaining you as an account holder, to facilitate transaction execution and settlement, registration of your holdings of financial products, and to provide other related services to you through your FSP. All this is required by the Corporations Act and the Rules of ASX Group or other Operator of a market on which we transact. Should you choose not to provide the personal information requested, we may be unable to provide some or all of the services required.
We are obliged to confirm and record your identity in accordance with the Corporations Act and other legislation preventing criminal activity such as money-laundering and the financing of terrorism. Consequently, your FSP must notify us of changes to personal information (e.g. change of address) already provided to us.
Your personal information will only be disclosed internally within FinEx in accordance with internal administration and operations procedures. In relation to transactions involving ASX traded products, we usually disclose personal information about identity and address to ASX Settlement, the operator of CHESS, and to product holder Registries. In relation to transactions on other
Australian or foreign markets, we disclose
the minimum information required by the Stockbrokers we use. They use and disclose that information to the extent necessary to transact, settle and register or transfer product holdings.
We may also be required to disclose information to your bank, cash management trust operator or other deposit taker. We may be required to disclose your information to ASX (and other ASX Group members and tribunals), ASX Clear, the Securities Exchanges Guarantee Corporation Ltd (SEGC) which is the operator of the National Guarantee Fund, and any court or tribunal, authority or regulatory body such as ASIC, AUSTRAC and operators of disputes or complaints resolution schemes in order to comply with relevant legislation, regulations and rules. We may be required to disclose your information to debt collectors, credit reporting agencies, our auditors, contractors or service providers (such as those we use to settle your transactions) and to other parties authorised and/or required by law to collect or access your information.
Generally, unless required by law, regulation or rule your personal information will not be passed to any third-party without your consent or the consent of your FSP. Nor will it be used for purposes other than described above.
Your personal information is stored securely and you have the right to access and review it, and to request its correction if in error.