In specie transfer guidelines

Transcription

1 In specie transfer guidelines Portfoliofocus Premium Investment Service Portfoliofocus Premium Retirement Service March 2017 INFORMATION FOR ADVISERS

2 Contents In brief....1 Guidelines for in specie transfers (deposits)....2 Guidelines for in specie transfers from Portfoliofocus Premium Investment Service (withdrawals)...8 Fund lists...10 Frequently asked questions...11 Forms required...13 The of the Portfoliofocus - Premium Investment Service and the Portfoliofocus Premium Retirement Service is Navigator Australia Limited ABN AFSL ( Navigator ) 2

3 In brief What is it? Which Portfoliofocus products accept in specie transfers? How does it apply to Portfoliofocus Premium products? In specie is a process of transferring investment funds or shares without actually selling the underlying investment product (between platforms or from retail funds into a platform) Portfoliofocus Premium Investment Service deposits and withdrawals Portfoliofocus Premium Retirement Service deposits only Investment Service only: transfers that do not involve a change in beneficial ownership can be processed without capital gains tax (CGT) implications. Generally a change in beneficial ownership will occur when an investor transfers from one entity type to another e.g. individual transfers to super funds Retirement Service only: generally there will be CGT implications when an in specie transfer is processed as there is always a change of beneficial ownership Note: You can also transfer shares into the Integrated Separately Managed Account (the SMA ) offered through Investment Service or Retirement Service What is the benefit? Investment Service only: transfer of assets without realisation of any capital gains consolidation of investments and consolidated reporting removes the risks associated with time out of the market retail funds generally require a very time consuming process to review, therefore beneficial to consolidate onto a platform further discounts on the administration fee (for higher balances, capping and fee linking) Which funds and shares can be transferred? all investment funds available on the Investment Service Investment Allocation Authority and Retirement Service Investment Allocation Authority all shares available on the Investment Service Shares list and Retirement Service Shares list For any investments not on the above Investment Allocation Authorities or Shares lists please contact us. What should advisers consider? fee comparisons exit penalties from external provider/fund manager whether the external provider/fund manager allows external in specie transfers stamp duty SOA corporate actions may delay the final Cash Account payment for external in specie transfers/withdrawals involving shares the time involved; it is a lengthy process and investors may not be able to switch or redeem for up to 12 weeks for accurate future CGT reporting you must provide a complete transaction/parcel history for each investment transferred. Any investment fund and/or share that you are transferring that does not have complete transaction/parcel history may result in the incorrect CGT being calculated and reported for as long as the investment fund and/or share is in the Investment Service or the Retirement Service new Portfoliofocus Premium investors must deposit a minimum of $1,000 into their Cash Account to cover stamp duty and fees (such as Ongoing Administration Fee) plus the minimum Cash Account requirement, in order to avoid investment sell downs in the quarterly minimum liquidity process potential CGT liabilities share investment limits (Retirement Service only) contribution caps for personal contributions concessional and personal contributions non concessional. Contributions that exceed the respective caps may incur additional excess contribution tax (Retirement Service only) for transfers of share(s) into the SMA you must provide complete transaction/parcel history. A transfer into the SMA cannot be processed without complete transaction/parcel history Fees The does not charge any fees to clients for processing in specie deposits. However, initial and ongoing fees and commissions may still apply to the account. some external providers/fund managers charge exit fees for in specie transfers in specie withdrawals from Portfoliofocus Premium incur a $125 fee per investment fund/share The client and adviser should consider the stamp duty payable for transferring NSW registered investment funds. Fees and stamp duty rates are current as at July Where there is a change in beneficial ownership, the following stamp duty rates will apply: where an investment fund is registered in NSW, the rate of 60 cents per $100 or part of $100 will be applied. Where there is no change in beneficial ownership, the following stamp duty rates will apply: where an investment fund is registered in NSW, a minimum rate of $10 applies. Stamp duty does not apply to listed shares. FAQ Please refer to Frequently Asked Questions on pages 11 and 12 Contact for information Business Development Contact your Business Development Manager Client Services Adviser Services

4 Guidelines for in specie transfers deposits Investment funds Before you start, check that: the other provider allows in specie withdrawals and if so, check associated fees The can accept the investment funds that appear on the latest Investment Service, or Retirement Service, Investment Allocation Authority in some instances there will be funds that we cannot transfer. A partial in specie transfer combined with the sell down may still result in a positive outcome for the client if any funds need to be sold, arrange this prior to the in specie transfer ensure re-investment of earnings and regular investment arrangements with the other provider are ended so that unit holdings do not change during the transfer process. Failure to do this could result in lengthy delays and stamp duty may be payable again transfers to badged products are completed on the badge specific paperwork a minimum $1,000 deposit is enclosed with the new business application (if setting up a new account) in order to cover stamp duty and fees (such as the Ongoing Administration Fee) plus the minimum Cash Account requirement in order to avoid investment sell downs in the quarterly minimum liquidity process. Please be mindful of stamp duty (refer to page 3) confirm with the other provider the forms required to facilitate the withdrawal from their platform ensure all documents are complete and accurate as incomplete forms will delay the in specie process Required documentation For new accounts Portfoliofocus Premium Investment Service Application form OR Portfoliofocus Premium Retirement Service Application form attach a minimum $1,000 deposit to the application to open the account (to cover stamp duty and fees) plus the minimum Cash Account requirement for new buys of investment funds, specify the fund and the amount to purchase on a separate Investment Allocation Authority In specie transfers to Portfoliofocus Premium Investment Service Deposit form OR In specie transfers to Portfoliofocus Premium Retirement Service Deposit form it is mandatory to supply APIR codes of the funds being transferred otherwise this may delay the in specie transfer In specie transfers transaction/parcel history for Investment funds and Shares (Investment Service only) AND/OR Incomplete transaction/parcel history declaration (Investment Service only) Standard Transfer Form (STF) required for correct reporting of realised gains any investment fund that you are transferring that does not have complete transaction/capital gains history may result in the incorrect CGT being calculated and reported for as long as the investment fund is in the Investment Service one form per fund generally supplied by other provider, if not, this is generated by the 4

5 Transfer steps for investment funds deposits Completed by: Notes: STEP 1 Adviser Complete documentation and send to: Portfoliofocus Premium In specie Transfers GPO Box 1274 Melbourne Victoria 3001 STEP 2 Adviser Complete transaction/parcel history for investment funds complete the In specie transfers transaction/parcel history for Investment funds and Shares spreadsheet available on the adviser secure section of investinfo.com.au/portfoliofocus the in specie transfer will not be processed until we have received this spreadsheet and/or the Incomplete transaction/parcel history declaration has been completed STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8 STEP 9 External provider/ fund manager or client The receives and processes documentation account is set up by us and deposit is processed STFs are generated by us (if not already supplied by other provider) quality checking occurs at this stage stamp duty is deducted from the client s Cash Account STFs sent to other IDPS provider/client for signing External provider/fund manager or client sign STFs and send back to the STFs are processed STFs are signed by us stamp duty is paid electronically to the State Revenue Office if any investment funds are registered in NSW or the ACT. STFs sent to fund manager we forward STFs to fund managers for processing Follow up we follow up fund managers for confirmation of transfers STEP 10 Fund manager Confirmation transfers approved fund manager confirms order to us STEP 11 STEP 12 STEP 13 Processing of investment funds we process confirmation of investment funds Final processing of transfers we enter transaction/parcel history into the system (Investment Service only) quality checking occurs again at this stage Confirmation sent to investor confirmation letter and statement is sent to the investor 5

6 Guidelines for in specie transfers deposits (cont.) Shares Before you start, check that: The can accept the shares that appear on the current Investment Service, or Retirement Service Shares list in some instances there will be shares that we cannot transfer. A partial in specie transfer combined with the sell down of shares may still result in a positive outcome for the client if any shares need to be sold, arrange this prior to the in specie transfer if coming from a Holder Identification Number (HIN)/ broker sponsor, provide Participant Identification Number (PID) and broker name if coming from a Security Reference Number (SRN), provide current holding statements displaying the full Security Reference Number. This will usually start with an I transfers to badged products are completed on the badge specific paperwork a minimum $1,000 deposit is enclosed with new business application (if setting up a new account) in order to cover stamp duty and fees (such as the Ongoing Administration Fee) plus the minimum Cash Account requirement, in order to avoid investment sell downs in the quarterly minimum liquidity process. ensure all documents are complete and accurate as incomplete forms will delay the in specie process. Note that the seller details on the Deposit Australian Standard Transfer Form Shares Only must be filled out exactly as the shares are registered with no cross outs, abbreviations or liquid paper, or the forms will not be accepted by our broker E*Trade Transfers into the SMA The can only accept share transfers into the SMA where those shares are contained in the chosen SMA Model Portfolio. For transfers of shares into the SMA you must provide complete transaction/parcel history. A transfer into the SMA cannot be processed without complete transaction/parcel history. Required documentation For new accounts Portfoliofocus Premium Investment Service OR Portfoliofocus Premium Retirement Service Application form In specie transfers to Portfoliofocus Premium Investment Service Deposit form OR In specie transfers to Portfoliofocus Premium Retirement Service Deposit form In specie transfers transaction/parcel history for Investment funds and Shares (Investment Service only) AND/OR Incomplete transaction/parcel history declaration (Investment Service only) Deposit Australian Standard Transfer form Shares only Current Holding Statement attach a minimum $1,000 deposit (to cover stamp duty and fees) plus the minimum Cash Account requirement to the application to open the account for new buys, specify share and the amount to purchase on a separate Investment Allocation Authority please supply ASX codes of the shares being transferred otherwise this may delay the in specie transfer complete transaction/parcel history is required for correct reporting of realised gains any shares that you are transferring that do not have complete transaction/capital gains history may result in the incorrect CGT being calculated and reported for as long as the share is in the Investment Service one form per share generally supplied by the other provider, if not, this is generated by the for issuer sponsored shares 6

7 Transfer steps and time frames for shares deposits Completed by: Notes: STEP 1 Adviser Complete documentation and send to: Send all documentation addressed to: Portfoliofocus Premium In specie Transfers GPO Box 1274 Melbourne Victoria 3001 STEP 2 Adviser Complete transaction/parcel history for shares complete the In specie transfers transaction/parcel history for Investment funds and Shares spreadsheet available on the adviser secure section of investinfo.com.au/portfoliofocus the in specie transfer will not be processed until we have received this spreadsheet and/or the Incomplete transaction/parcel history declaration has been completed STEP 3 STEP 4 STEP 5 The receives and processes documentation account is set up by us and deposit is processed quality checking occurs at this stage STFs are signed by us STFs are sent to E*TRADE for processing STEP 6 E*TRADE Confirmation transfers approved E*TRADE confirms order to us STEP 7 STEP 8 STEP 9 Confirmation transfers approved we process confirmation of shares Final processing of transfers we enter transaction/parcel history into the system (Investment Service only) quality checking occurs again at this stage Confirmation sent to investor confirmation letter and statement is sent to the investor 7

8 Guidelines for in specie transfers from Portfoliofocus Premium Investment Service withdrawals Investment funds Don t forget to check that: the other provider/fund manager allows in specie deposits and the investment funds you are transferring are available on the destination platform there are sufficient funds in the client s Cash Account to cover three months management fees, the $125 in specie withdrawal transfer fee per fund, and pro-rata of the remaining service fees (if applicable) required cash withdrawals are conducted prior to the in specie transfer commencing as the account is unable to be accessed during the transfer process check with the other provider/fund manager for the forms required to be completed for the transfers to occur Required documentation In specie transfers from Portfoliofocus Redemption Portfoliofocus Premium Investment Service It is important to state the correct IDPS provider (or custodian) who will be signing as the seller to prevent the Operator from re-generating STFs and causing delays Transfer steps for investment funds withdrawals Completed by: Notes: STEP 1 Adviser Complete documentation and send to: Send all documentation addressed to: Portfoliofocus Premium In specie Transfers GPO Box 1274 Melbourne Victoria 3001 STEP 2 Operator The Operator receives and processes documentation and generates STFs withdrawal documents are processed by us re-investments and all regular facilities are automatically closed down STFs are generated quality checking occurs at this stage STEP 3 Operator STFs are signed by us STEP 4 Operator STFs sent by the Operator to other IDPS provider we forward STFs to other IDPS provider for signing other IDPS provider to arrange stamp duty (if applicable) and forward STFs to fund managers for processing STEP 5 Operator Follow up we follow up fund managers for confirmation of transfers out STEP 6 Operator Final processing of transfers, confirmation sent to investor we receive confirmation from fund managers account closes cover letter and parcel history generated from the system along with a cheque (if applicable), sent by us to the other IDPS provider we send confirmation letter and statement to the investor quality checking occurs again at this stage 8

9 Shares Don t forget to check that: the other provider/fund manager allows in specie deposits and the shares you are transferring are available on the destination platform there are sufficient funds in the client s Cash Account to cover three months management fees, the $125 in specie Withdrawal Transfer Fee per share, and pro-rata of the remaining service fees (if applicable) required cash withdrawals are conducted prior to the in specie transfer commencing as the account is unable to be accessed during the transfer process check with the other provider/broker for the forms required to be completed for the transfers to occur Please note: Cash Account funds cannot be released until any outstanding corporate actions have been finalised. Required documentation In specie transfers from Portfoliofocus Premium Redemption Portfoliofocus Premium Investment Service Withdrawal Australian Standard Transfer Form Shares only Portfoliofocus Premium Investment Service It is important to state the correct provider (or custodian) who will be signing as the seller to prevent us from requesting new STFs and causing delays. It is important to complete one form per share to prevent delays due to further requests for the correct paperwork. Transfer steps and time frames for shares withdrawals Completed by: Notes: STEP 1 Adviser Complete documentation and send to: Send all documentation addressed to: Portfoliofocus Premium In specie Transfers GPO Box 1274 Melbourne Victoria 3001 STEP 2 Operator The Operator receives and processes documentation withdrawal documents are processed by us reinvestments and all regular facilities are automatically closed down quality checking occurs at this stage STEP 3 Operator STFs are signed by us STEP 4 Operator STFs sent to E*TRADE for processing STEP 5 E*TRADE Confirmation transfers approved E*TRADE confirms order to us STEP 6 Operator Confirmation transfers approved we process confirmation of shares STEP 7 Operator Final processing of transfers account closes cover letter and parcel history generated from the system along with a cheque (if applicable), sent by us to the other provider or client we send the confirmation letter and statement to the investor quality checking occurs again at this stage 9

10 Fund and share lists Can we add funds to the platform to enhance the in specie offer? Guidelines are in place for assessing when new funds or shares may be added to the accepted funds list to facilitate an in specie transfer. Exceptions outside of these guidelines are assessed on a case by case basis. The funds include those available on: Investment Service Investment Allocation Authority (IAA) Investment Service Shares List OR Retirement Service Investment Allocation Authority (IAA) Retirement Service Shares List To request funds or shares not appearing on the Investment Allocation Authority or Shares list, please contact your Business Development Manager or Adviser Services for assistance. Frequently asked questions Deposits Which services accept in specie transfers? Portfoliofocus Premium Investment Service and Portfoliofocus Premium Retirement Service are the only services that can accept in specie transfers. Why should you always check the availability of funds before beginning a transfer? We can only transfer funds that are available on the accepted funds list and Shares List. If the fund cannot be transferred to the then it may have to be sold or switched to another fund prior to the transfer taking place. If these details are not confirmed prior to the transfer, there will be delays in completing the transfer. Is there a minimum amount that can be transferred? Details about minimum investment amounts are in the Portfoliofocus Premium Investment Service IDPS Guide, Portfoliofocus Premium Retirement Service PDS and/or Separately Managed Account PDS. The same rules apply to in specie transfers. Speak to your Business Development Manager or Adviser Services for further information on minimum amounts. How is my client s investment transferred in specie? All transfers are processed in unit values, not dollar values, on the date of transfer. So the dollar value of your client s transfer may change from the time the initial request was made. It s important you check the contribution limits applicable to your client for superannuation/pension accounts. 10

11 Can we add funds to the platform to enhance the in specie offer? Guidelines are in place for assessing when new funds may be added to the accepted funds list to facilitate an in specie transfer. Exceptions outside of these guidelines are assessed on a case by case basis. To request funds or shares not currently on the Investment Allocation Authority or Shares List, please contact your Business Development Manager or Adviser Services for assistance. Can we do a partial in specie transfer if we don t currently hold all funds on your platform? Yes. So what is the process? In some instances there will be funds that we cannot transfer. A partial in specie transfer combined with the sell down may still result in a positive outcome for the client. Normal rules apply for those funds that are transferable; a redemption of the balance to the should be processed where the funds are not transferable. Why can an in specie transfer take a long time to complete? An in specie transfer involves many dealings with external parties such as the external provider, fund managers, state revenue offices, E*TRADE etc. Each party has their own turn around times which can influence the processing time of a transfer. In addition to this, it is vital that the required documents are supplied and filled out correctly otherwise this may delay the transfer. Why do we require the original documentation? The state revenue offices, E*TRADE and the individual fund managers only accept original documents. There is no compromise on this requirement. Why do all regular facilities need to be suspended when we are transferring funds into and out of the platform? If the client has re-investment of income or a regular buy facility attached to their investment, and they wish to transfer their assets from an external provider to the, then all regular facilities need to be cancelled to ensure that the unit holdings do not change during the transfer. Should the unit amounts change during a transfer then new Standard Transfer Forms will need to be completed and stamp duty may be payable again. This would delay the process further. These same rules apply for transfers out of the Portfoliofocus Premium Investment Service only. Why do we need funds upfront for a transfer into Portfoliofocus Premium? We need an initial investment of $1,000 (minimum) to cover minimum cash requirements, fees and stamp duty that will be charged to the account. In some instances the Cash Account can go into negative while the transfers are taking place. We can confirm your client s individual requirements with this deposit. What support is available for advisers dealing in larger cases? Support is available from the Business Consolidation Team where the individual case is large (i.e. in excess of $1 million). If you need additional support please contact your Business Development Manager for further details. Each transfer will be assessed on a case by case basis. What are the associated costs to the client when moving funds into Portfoliofocus Premium? The does not charge an additional fee for in specie deposits, however advisers should check with the current provider whether there are any exit penalties. There is a stamp duty charge per investment fund of the value of each investment fund for NSW and ACT based fund managers. Rates depend on the state and whether the client is transferring to a Portfoliofocus Premium Investment Service or Portfoliofocus Premium Retirement Service. The collects and pays this charge on the client s behalf from their deposit. Refer to page 3 for details of the fees. In most instances the platform fee is an additional cost to the current retail fund MER. Some retail funds provide a rebate to the which is passed on to the investor reducing the overall cost. For details of these funds with rebates, please contact your Business Development Manager. 11

12 Frequently asked questions (cont.) Are there any assets or other platforms that we cannot transfer? Yes. Only investment funds and shares available on the current Investment Allocation Authority and Shares List can be transferred. In addition some platform structures do not support the in specie process and a sell down of assets may be required. You will need to check with the current provider if there is any doubt about the ability to facilitate this process. Who is responsible for collating all necessary documentation and following up all outstanding requirements for in specie deposits into Portfoliofocus Premium? The adviser is responsible for collating all of the required documentation and ensuring the forms are completed accurately. Incomplete forms can delay the in specie process. Your Business Development Manager and Adviser Services are available to assist you with this process to ensure that the funds are transferred as quickly and easily as possible with little inconvenience to the client and adviser. Why do we charge a $125 fee per investment fund or share on in specie withdrawals? This is an administration cost that is currently charged. Why do we need sufficient funds in the Cash Account for an external in specie withdrawal? We need sufficient funds in the client s Cash Account to cover 3 months management fees, the $125 in specie withdrawal transfer fee per fund/share, and pro-rata of the remaining service fees (if applicable). Where can I get more information? Business Development Contact your Business Development Manager Client Services Adviser Services Withdrawals (Investment Service only) Why do all regular facilities and reinvestments need to be suspended when we are transferring funds out of Portfoliofocus Premium? If the client has re-investment of income or a regular buy facility attached to their investment, and they wish to transfer their assets from the Portfoliofocus Premium Investment Service to an external IDPS provider, then all regular facilities need to be cancelled to ensure that the unit holdings do not change during the transfer. Should the unit amounts change during a transfer then new Standard Transfer Forms will need to be completed and stamp duty may be payable again. This would delay the process further. These same rules apply for transfers into Portfoliofocus Premium. 12

13 Forms required for in specie transfers Portfoliofocus Premium Investment Service In specie transfers to Portfoliofocus Premium Investment Service Deposit In specie tranfers transaction/parcel history for Investment funds and Shares Deposit Australian Standard Transfer Shares Portfoliofocus Premium Investment Service In specie transfers from Portfoliofocus Redemption Portfoliofocus Premium Investment Service Withdrawal Australian Standard Transfer Form Shares only Portfoliofocus Premium Investment Service Portfoliofocus Premium Retirement Service In specie transfers to Portfoliofocus Premium Retirement Service Deposit Deposit Australian Standard Transfer Shares Portfoliofocus Premium Retirement Service To access these forms go to n-link or investinfo.com.au/portfoliofocus Forms required to set up a new Portfoliofocus Premium Investment Service and Portfoliofocus Premium Retirement Service Portfoliofocus Premium Investment Service Portfoliofocus Premium Retirement Service Portfoliofocus Premium Investment Service IDPS Guide and Application Form Portfoliofocus Premium Retirement Service PDS, Reference Guide and Application Form To access these forms go to n-link or investinfo.com.au/portfoliofocus Please forward all original documents to the following address: Portfoliofocus Premium In Specie Transfers GPO Box 1274 Melbourne VIC 3001 A For the information of financial advisers only. Distribution of this document to any other person, including clients of financial advisers, is not authorised. The above information is current as at the date of publication. While every attempt has been made to ensure the accuracy and reliability of the information, it is not guaranteed in any way. NULIS Nominees (Australia) Limited ABN , AFSL ( NULIS ), is the Trustee of the Portfoliofocus Premium Retirement Service, a sub plan of the MLC Superannuation Fund ABN Navigator Australia Limited ABN , AFSL ( Navigator ), is the Operator of the Portfoliofocus Premium Investment Service and of the Portfoliofocus Premium Retirement Service. NULIS and Navigator are part of the NAB group. 13

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