Adviser Training. The Sterling Managed Account Service

Transcription

1 Adviser Training The Sterling Managed Account Service

2 Agenda Introduction to IAS, Managed Accounts and MDA s Understanding Roles and the Documentation Sterling Managed Account Service Comments Application and Other Key Processes Client and Adviser Reporting Transition of Asset Considerations Adviser Servicing

3 Who Is IAS? Sydney based company founded in 2005 Privately owned by several shareholders including staff with extensive experience in financial services A service provider enabling dealers to implement a UMA solution Approx $700 million in managed account FUM

4 Who Is IAS? 15 staff including internal technology development team Not an Investment Manager or Adviser Custody via HSBC who hold ASX listed securities, managed funds, term deposits, bonds, bank bills, cash Currently provide solutions to boutique advisory firms, investment managers and institutional groups

5 What Is A Managed Account? A managed portfolio service where the portfolio is managed by a professional manager (Sterling and its mandated managers) and implemented by a professional administrator (IAS)

6 True Role of a Managed Account Next evolution in the administration platform cycle after master trusts and wraps Integration of advice, investment management and administration into a service Advisers advise the client, Investment Managers manage portfolios and everything else becomes administration

7 What is a Managed Discretionary Account (MDA)? Available through a licensed MDA Operator The client authorisesthe MDA Operator to manage their portfolio against a set of rules (a mandate) without reference to the client A Service not a product and does not require a PDS Not unitised, all investments in the portfolio are beneficially owned by the client

8 Who Can Use The MDA? Individual/ Joint SMSF Trust Partnership Typically $200k and above but maybe not

9 Agenda Introduction to IAS, Managed Accounts and MDA s Understanding Roles and the MDA Documentation Sterling Managed Account Service Comments Application and Other Key Processes Client and Adviser Reporting Transition of Asset Considerations Adviser Servicing

10 Authorised Representatives Retail Retail Retail Investor Futuro Investor Investor Clients Futuro SOA Futuro FSG IAS FSG Managed Account Contract Application Form Sterling Investment Options Document Futuro as Adviser Services Agreement IAS MDA Operator Incidental Custodian Investment Management Agreement Sterling as Investment Manager Sub - Custodian Agreement Supervised Agents Agreement HSBC (Sub - Custodian) Specialist Investment Managers Roles of Parties and Document Structure

11 IAS Role MDA Operator responsible for the overall operation and compliance of the Service Administration responsible for establishing and maintaining client Portfolios, any records relating to the Portfolios and any reporting Custody monitoring HSBC as Sub-Custodian

12 IAS Role in Detail Issue and control of all documentation Technology Portfolio compliance Settlements Reconciliations Reconciliations Reporting including year end Fee calculation and collection Corporate events and income Datafeeds

13 Role of Futuro Ensuring advisers provide appropriate advice to clients to invest in the Service via an Investment Program (SoA) Ensuring advisers provide ongoing advice on the Ensuring advisers provide ongoing advice on the client investment in the Service (RoA)

14 Role of Sterling Sterling Investment Committee Identify and appoint specialist managers for mandates and identify managed funds for inclusion in MF Portfolios Monitor managers Manage MF Portfolios

15 Role of Appointed Investment Managers Manage selection and weighting of the investments in client portfolios Buying, selling or rebalance investments in client portfolios including trading Corporate action decisions where required Model commentary

16 Specialist Investment Managers Managed Fund Portfolio Investment Options Conservative MF Moderate MF Balanced MF Growth MF High Growth MF Diversified Direct Portfolio Investment Options Conservative Conservative Pension Balanced Balanced Income Balanced Pension Growth Mandated Manager Sterling Sterling Sterling Sterling Sterling Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons

17 Specialist Investment Managers Asset Class Options Australian Equities Core Australian Equities Growth Australian Equities Smaller Companies Diversified Yield Property Securities International Alternative Asset Risk Targeted Transition Cash Mandated Manager Dalton Nicol Reid Joseph Palmer and Sons Paterson s Asset Management Realm Investment House Dalton Nicol Reid Sterling Sterling Sterling Joseph Palmer and Sons IAS

18 The Documents Futuro SoA Futuro FSG IAS FSG (specific to Sterling) IAS Managed Account Contract (branded as Sterling) Sterling Investment Options Document Sterling Application Form

19 Managed Account Contract Client contracts with IAS for the Managed Account Service Badged as Sterling but standard text Application Form needs to be signed which references all relevant documents

20 What is an Investment Options document? IAS specific term Discloses the Investment Options to the client and forms part of the personal advice Sterling provides to clients Not a PDS and thus not subject to the rules in a PDS The Investment Options selected for a client form an Investment Program for the client (SoA)

21 What is an Investment Option? A documented set of rules which will be applied to any client portfolio that selects the Option eg. number of stocks, maximum weighting in a stock Can be implemented differently for each client investing in the Investment Option Implemented via a model portfolio

22 What is a Model Portfolio? A number of investments and a weighting for each investment including a cash component Is not a Fund or scheme Does not have a tax position Managed according to an investment strategy that is disclosed to the client

23 Giving Initial Compliant Advice Futuro SoA Futuro FSG IAS FSG (specific to Sterling) IAS Managed Account Contract (branded as Sterling) Sterling Investment Options Document Sterling Application Form

24 Giving Ongoing Advice No RoAsfor ongoing changes in the Portfolio No RoAsfor any corporate actions No need to phone clients, discuss changes or make file notes for changes in the Portfolio Requirement for an annual review to meet the MDA legislative requirements

25 Agenda Introduction to IAS, Managed Accounts and MDA s Understanding Roles and the MDA Documentation Sterling Managed Account Service Overview Application and Other Key Processes Client and Adviser Reporting Transition of Asset Considerations Adviser Servicing

26 Investment Options Managed Fund Portfolio Investment Options Conservative MF Moderate MF Balanced MF Growth MF High Growth MF Diversified Direct Portfolio Investment Options Conservative Conservative Pension Balanced Balanced Income Balanced Pension Growth Mandated Manager Sterling Sterling Sterling Sterling Sterling Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons Joseph Palmer and Sons

27 Investment Options Asset Class Options Australian Equities Core Australian Equities Growth Australian Equities Smaller Companies Diversified Yield Property Securities International Alternative Asset Risk Targeted Transition Cash Mandated Manager Dalton Nicol Reid Joseph Palmer and Sons Paterson s Asset Management Realm Investment House Dalton Nicol Reid Sterling Sterling Sterling Joseph Palmer and Sons IAS

28 Managed Account Pricing Managed Fund Investment Options Portfolio Management Fee * Conservative Plus % Moderate Plus % Balanced Plus % Growth Plus % High Growth Plus % Diversified Direct Portfolio Investment Options Conservative % Conservative Pension % Balanced % Balanced Income % Balanced Pension % Growth % * Net of GST and RITC but excludes Managed Fund ICRs. For account balances above $2.5m, the above fees are reduced by 0.21% for the balance above $2.5m

29 Managed Account Pricing Asset Class Options Portfolio Management Fee * Australian Equities Core % ** Australian Equities Growth % Australian Equities Smaller Companies % ** DiversifiedYield % Property Securities % ** International % Alternative Asset % Risk Targeted % Transition % Cash % * Net of GST and RITC but excludes Managed Fund ICRs. For account Balances above $2.5m, the above fees are reduced by 0.21% for the balance above $2.5m ** Performance fee applies. Refer to Sterling Investment Options Document for more detail

30 Other Fees and Costs Minimum Portfolio Management Fee -$42 per month Transaction Fee -$10.50 per trade (buy or sell) except for Transition Portfolio $21.00 (buy or sell) Brokerage -differs across Managers, low as 4bp for Diversified Direct and Australian Equities Growth Portfolios In specie fees in and out

31 Transition and Cash Portfolio Cash Portfolio is established for every client Transition Portfolio established for clients requiring assets to be held in addition to those invested in the Sterling Portfolios Note Joseph Palmer and Sons will implement all changes required for the Transition Portfolio

32 Other Features Choice of tax methodology completed at time of application In specie transfers for ASX listed securities and managed funds Switching between Investment Options common stocks and weightings are not sold

33 Agenda Introduction to IAS, Managed Accounts and MDA s Understanding Roles and the MDA Documentation Sterling Managed Account Service Comments Application and Other Key Processes Client and Adviser Reporting Transition of Asset Considerations Adviser Servicing

34 Signing Clients Up To The Service All application details must be input and submitted online through the Sterling website Different information required for SMSF, Individual, Trust and Partnership Input fields to generate application, complete fee details and print for signing by the client Record income sweeping instructions, in specie notes and any portfolio exclusions in Special Instructions

35 Signing Clients Up To The Service BPAY, direct credit, direct debit or cheque Managed Account Number on top right corner of Application Form Transfer into the Service existing holdings eg. from issuer sponsored broker sponsored Applications to IAS Workflow reporting to you re status

36 Signing Clients Up To The Service IAS will validate application and establish an Account and Portfolios for each Investment Option selected IAS will send client a Welcome letter IAS will separately send client a password to access the Service reporting

37 Understanding How Cash Works Cash Portfolio unmanaged cash typically used as a reserve for Pensions, money on the way in, money being held from investment Cash holding in a Managed Portfolio every Managed Portfolio has a minimum cash exposure for liquidity in trading and fees Adviser responsibility to monitor Cash Portfolio

38 Additional Investments Process BPAY, direct credit, direct debit, chequeor transfer into the Service existing holdings eg. from issuer sponsored broker sponsored Reference number is Managed Account Number Online cash movement process

39 Withdrawals Need to nominate which Portfolio to withdraw from Instructions given via the Adviser, Adviser inputs online and sends instruction to IAS First option should be Cash Portfolio Second option is Managed Portfolios If withdrawing from Managed Portfolios, note that a rebalance is required brokerage and transaction fees

40 Regular Savings Plan Complete in Application or subsequent Requires Direct Debit Request in Application to be signed by the client Processed on 15 th of each month Processed on 15 th of each month Credit to Cash Portfolio as small injections will not lead to rebalances due to tolerances

41 Regular Withdrawal Plan Complete in Application or separately Need to nominate which Portfolio to withdraw from If from Pension Portfolios, higher cash weighting will manage cash for you If not using Pension Portfolios, use Cash Portfolio wherever possible to avoid brokerage/ transaction fees Processed at any time based on setup

42 Income Sweeping Recent enhancement Enables income from ASX listed and certain other assets to be redirected to another portfolio ie. Australian Share Income to Cash Portfolio Include in Special Instructions on Application Form or liaise with IAS Goes hand in hand with use of Cash Portfolio for pension payments

43 Switches Advise IAS via or Switch Form on Sterling website Assets moved to new Portfolio from existing Portfolio assets sold where not held in new Portfolio or reduced weighting required Effectively a Portfolio closure not an Account closure

44 Corporate Actions Corporate actions will be sent to the appointed Investment Manager Decisions made by the appointed Investment Manager For Transition Portfolio, Investment Manager may liaise with you Default option is No Action

45 Reweighting and Rebalancing Investment managers will reweight or rebalance client Portfolios as necessary A rebalance is where the weighting of an investment or investments in client Portfolios is brought into line with the a model portfolio Generally on change in view of investments or on withdrawal Be aware, generation of brokerage and transaction fees

46 Ongoing Management Clients will not receive any mail direct from registries all to HSBC and then to Investment Managers as relevant Dividends are credited to the cash holding in each Portfolio unless income sweeping in place in which case the income will be redirected to the nominated Portfolio Advisers to monitor the Cash Portfolio balance if Regular Withdrawal Plans in place using the Cash Portfolio

47 Fee Calculation and Charging Monthly except for performance fees which are quarterly Fees are deducted from the Portfolio level ie. if a client invests in two Portfolios, fees will be charged to each Portfolio Portfolio Management Fee encompasses IAS, Investment Manager and Sterling Narration is Portfolio Management Fee Performance fee is high watermark Narration is Performance Fee

48 Fee Calculation and Charging Transaction fees are included in brokerage cost and presented as one cost $10, bp = $4.20 Transaction Fee = $10.50 Transaction Fee = $10.50 Total brokerage presented = $14.70

49 Adviser Fee Calculation and Charging Monthly for Contribution Fees and Adviser Fees Paid to Futuro within 10 business days Futuro pay advisers Reporting to Futuro re allocation to advisers

50 Datafeeds Xplanand AdviserLogicdatafeed will be implemented from live date for all Futuro advisers intending to use Class Super datafeed agreed in principle Other datafeed requirements to be raised with IAS

51 Agenda Introduction to IAS, Managed Accounts and MDA s Understanding Roles and the MDA Documentation Sterling Managed Account Service Comments Application and Other Key Processes Client and Adviser Reporting Transition of Asset Considerations Adviser Servicing

52 Reporting and Online Enquiries Link from Futurowebsite to Sterling Quarterly reporting as at the end of quarter Annual reporting including tax summary Range of on demand reports for advisers and clients to keep up to date with

53 Agenda Introduction to IAS, Managed Accounts and MDA s Understanding Roles and the MDA Documentation Sterling Managed Account Service Comments Application and Other Key Processes Client and Adviser Reporting Transition of Asset Considerations Adviser Servicing

54 Transitioning Assets How and where the asset is held? Issuer sponsored signed CHESS transfer form to IAS Broker sponsored generally, signed letter to broker with copy to IAS requesting transfer of securities to HSBC Capital Gains Tax parcels must be provided with Transfer Forms or letter this is how IAS records the holding

55 Transitioning Assets Managed funds attract stamp duty no change of beneficial owner of $50 in NSW Rebalancing will result in investments in a Portfolio being sold if they are not in the model portfolio at the same weighting as the client holding Transition Guide on Futuro website

56 Agenda Introduction to IAS, Managed Accounts and MDA s Understanding Roles and the MDA Documentation Sterling Managed Account Service Comments Application and Other Key Processes Client and Adviser Reporting Transition of Asset Considerations Adviser Servicing

57 Adviser Assistance Education on managed accounts Initial training on website or processes Higher level queries David Heather (Head of Distribution) and Paul La Macchia (Business Development Manager)

58 Day to Day Queries IAS client service Operational queries

59 Getting Started A login to the Sterling website A client Assistance from IAS on hand

60 Disclaimer This information is unsolicited general information only for licensed dealers and advisers. None of the information contained herein is to be taken as personal financial product advice. In preparing this information, Investment Administration Services Pty Ltd has not taken into account any individual investor s objectives, tax and financial situation or particular needs. Before making any decision based on the information herein, investors should consider the appropriateness of any investment vehicle relevant to their own personal objectives, financial situation and needs. Investors should seek professional advice and read all relevant Product Disclosure Statements and/or other relevant documents before investing.