Financial Services Guide ('FSG')
Issue date: 26 November 2018
The provider of the services described in this Financial Services Guide is Stockspot Pty Ltd (ACN 163 214 319) as Authorised Representative (AR No. 453421) of Sanlam Private Wealth Pty Ltd (ABN 18 136 960 775) AFSL Number: 337927.
This document
The purpose of this Financial Services Guide (“FSG”) is to help you make an informed decision about the services we offer. This FSG is an important document that explains how we provide financial services to you. You should read this FSG carefully before using our services. It is intended to give you sufficient information to decide whether to obtain financial services from us.
In this document you will find information about:
- who we are;
- what financial services we provide and the products to which those services relate;
- what our responsibilities are and what type of advice we provide;
- how you can instruct us;
- what you can expect to pay for the financial services;
- what remuneration and other benefits may be paid to us, our employees or others;
- what to do if you have a complaint, and how it will be dealt with;
- for what purpose we use your contact data; and
- how you can contact us
This Financial Services Guide (FSG) is dated 26 November 2018 and is provided to you by Stockspot Pty Ltd ACN 163 214 319 (Stockspot, We, Our or Us) to inform you of the financial services we provide and to comply with our obligations as Corporate Authorised Representative (AR No. 453421) of Sanlam Private Wealth Pty Ltd (Sanlam). Sanlam holds an Australian Financial Services License (AFS Licence No. 337927) and has authorised the creation and distribution of this FSG. This FSG contains only general information about the services we offer.
If you have any questions, feel free to contact us by phone, email or on Facebook or Twitter.
You can contact Stockspot at enquiries@stockspot.com.au
Postal address: PO Box R1573, Royal Exchange NSW 1225
Phone: +61-2-8091-8090
About us
Stockspot is the independent thought leader on wealth creation, guiding Australians on a better way to invest, to build long-term wealth and security. We help create financial freedom to allow Australians to live more fullfilled lives. It’s financial freedom made simple.
Our philosophy is simple: invest into a broad mix of lowcost, low-risk products to harness the long-term power of compounding. It’s a strategy for success built on the fundamental values of simplicity, consistency and discipline.
The less you do, the more you earn. And throughout the process we help clients overcome their own emotional biases to embrace the uncomfortable, giving them the confidence to ‘stick to the plan’. Boring becomes brilliant.
What services are we authorised to provide?
Stockspot is an Authorised Representative (AR No. 453421) of Sanlam, which holds AFS Licence No. 337927. Stockspot is authorised by Sanlam to provide general and personal advice on and deal in the following classes of financial products to retail and wholesale clients (within the definition of the Corporations Act): Securities; Derivatives; Interests in Managed Investment Schemes limited to MDA Services. We are not authorised to include or provide custodial or depository services.
The Stockspot website provides general information as well as advice about investing, Exchange Traded Funds (ETFs) and MDA Services. Where we provide general advice, that information or advice does not take into account your personal and financial circumstances, needs and objectives. Because of that you should consider the appropriateness of the advice with regards to your personal and financial circumstances before acting on that advice.
You can also apply for personal investment advice from Stockspot via the website. Stockspot will assess your personal circumstances and suitability for the Stockspot Model Portfolios which are offered as part of a MDA Service. If you are considered a suitable candidate you will be provided with a MDA Contract which includes a Statement of Advice and Investment Program and complies with Division 3 of Part 7.7 of the Corporations Act. The MDA Contract will be issued in digital format for you to review and sign if you would like to proceed with the advice and access our services. We will also provide you with other relevant documents including PDS documents for any financial products we recommend and Service Agreements for any service providers.
Any personal advice we provide is valid for 30 days. If you have not acted on the advice within that time and decide to use our services later we will ask you to re-apply on our website to ensure that we have provided suitable advice based on the most up to date and relevant information about you.
What is a MDA Service?
A MDA Service is a managed investment scheme and a service for making a financial investment. Rather than being part of a large pool of money and/or investments, your portfolio is owned by you and managed for you pursuant to the Investment Program included in your MDA Contract. You are always the direct legal owner of the investments which are registered in your name.
In order to access this service, you agree to give to the MDA Operator (Sanlam) authority to act on your behalf in selecting and appointing a MDA Manager and overseeing the services provided to you including MDA Management, Execution, Cash Management, Reporting and Audit. Stockspot will be the appointed MDA Manager for the MDA Service it offers to you via Sanlam. As the appointed MDA Manager, it is Stockspot’s responsibility to make investments on your behalf according to an agreed Investment Program. In developing the Investment Program, we will apply our principles of diversification and risk management to meet your investment requirements. With a MDA Service, not only will you be the beneficial owner of the portfolio, but you will enjoy owner benefits and will have the ability to see the exact composition and value of your portfolio at any time (via our secure online service).
To find out more information about the structure of the MDA Service offered by Sanlam, please read the MDA Guide and the MDA Contract we provide to you.
A word of warning on risk
Most investment professionals agree that diversification is the key factor for achieving long-term market returns while mimimising risk. The Stockspot Model Portfolios provide exposure to 1,000+ global stocks, bonds and commodities by investing in Exchange Traded Funds (ETFs). Some of the benefits of a broad diversified portfolio over a more concentrated portfolio are lower country risk, lower industry risk & less stock specific risk. However it is important to understand that, even with a sensible diversified investment strategy and appropriate time horizon, investing is risky. Any investment portfolio can go up and down in value.
The Stockspot Model Portfolios attempt to reduce risk by employing Modern Portfolio Theory (MPT). The economists who developed MPT, Harry Markowitz and William Sharpe, received the Nobel Prize in Economics in 1990. Today, MPT is the most widely accepted framework for managing diversified investment portfolios. However, even a portfolio that is diversified across asset classes and geographies is likely to experience periods of negative performance.
The financial performance of the Stockspot Model Portfolios may be influenced by a variety of general domestic and international economic factors and business conditions, which are outside the control of Stockspot. These include (but are not limited to) changes in the inflation rate, commodities prices, exchange rates, interest rates, government fiscal, monetary and regulatory policy, natural disasters and acts of terrorism.
Stockspot may employ certain strategies that depend upon the reliability and accuracy of the analytical investment processes. To the extent such investment processes (or the assumptions underlying them) do not prove to be correct, Stockspot may not perform as anticipated, which could result in losses. Please carefully read the risks summarised in the PDS documents and the Terms and Conditions issued by the Execution and Clearing Broker and Cash Management Account provider.
No guarantee can be given in respect of the future earnings of the MDA Service or the capital appreciation of your investments within the MDA. The price of investments that Stockspot has purchased on behalf of you can fall as well as rise over time. There are risks associated with the MDA Service which are outlined in the MDA Guide and the MDA Contract given to you. There are also risks associated with the underlying investments within the MDA, which are outlined in the relevant PDS for each particular product. You should carefully consider the risks of each investment product before deciding to invest in this MDA.
The operating performance of the MDA Service may also be impacted by industry risk factors. These factors are outside the control of Stockspot. Such factors include (but are not limited to) increased compliance costs and variations in legislation and government policies. To counter the potential impacts of industry risk, all Stockspot Model Portfolios are available on a direct-ownership basis as part of an MDA Service. This means that you, as the investor, do not have counter-party risk. You also have the flexibility to own your Model Portfolio unadvised in the future so at any point you can opt-out of Stockspot’s advice.
Getting to know you
In order to offer personal advice to you, we first need to find out a bit about your financial circumstances, objectives and risk profile. This enables us to advise on an investment strategy that is appropriate and relevant to your situation. To find out about you we have built a sophisticated survey that covers:
- Your investment horizon including life stage, and income preference;
- Your risk profile including your attitude to market volatility and capital draw-down;
- Your financial situation including income, expenses and net asset position;
We won’t pass on your personal financial information to third parties unless you give us permission so please complete the survey as truthfully and completely as possible. The information you provide us determines the advice we return to you. If you provide incorrect or incomplete information our advice may not be appropriate for your circumstances.
Based on the information you give us about your risk profile, financial circumstances and objectives, Stockspot may recommend a Model Portfolio or Savings. Our services are not appropriate for everyone so if your personal circumstances are outside the scope of our expertise we will instead advise you to contact an appropriate specialist financial adviser.
If we do suggest a Model Portfolio or Savings, the underlying Investment Strategy for the Model Portfolio or Savings will be included in the Investment Program and Statement of Advice which forms part of the MDA Contract we give to you. Please read the contract carefully because it explains the basis for our recommendations and details the services we offer. If you agree to the Investment Program and MDA Contract you will be asked to digitally sign the MDA Contract to access our services.
We retain all MDA Contracts for as long as you are our client and for at least seven years after you have closed your account. You may request a replacement copy of your MDA Contract at any time within that period. If you decide that our services aren’t what you were after, you are welcome to terminate your MDA Contract and our services at any time. There are no exit fees payable by you.
Your privacy
The privacy of your personal information is of supreme importance to us. We value your trust and aim to help you manage and build wealth over a long period. The protection of your personal information is a vital part of this relationship. We will not disclose your information to any third parties unless we are required to do so under the law. You can find out more about our Privacy Policy on our website: https://www.stockspot.com.au/legal/privacy-policy/
What other disclosure documents and statements will I receive?
In addition to this Financial Services Guide, you may also receive from Stockspot;
- A MDA Contract which includes a Statement of Advice (SOA) that is prepared in accordance with the requirements in Division 3 of Part 7.7 (ie. the SOA will set out the advice and will include information regarding the basis on which the advice was given, any fees or commissions received in providing the advice). The MDA Contract also includes an investment program which contains the following information;
- The basis on which Stockspot considers the MDA to be suitable for you;
- Any significant risks associated with this MDA;
- The nature and scope of the discretions Sanlam as the MDA Operator, and Stockspot as the MDA Manager will be authorised and required to exercise under the MDA Contract and any investment strategy that is to be applied in exercising those discretions;
- Warnings about the MDA Contract, such as that: the MDA Service may cease to be suitable for you if your relevant circumstances change; the MDA Service may not be suitable for you if you have provided Stockspot with limited or inaccurate personal information about your relevant circumstances.
- Our MDA Guide
- Client Service Agreements from any third party service providers
- Product Disclosure Statements (PDS’s) where we have recommended ETFs. The PDS include information about the ETF products so that you can make an informed decision whether to acquire them. These also include any relevant terms, significant risks and costs associated with the ETFs.
Where you maintain the advice relationship with us, a Statement of Advice may not be provided for further advice situations provided that your circumstances and the basis of the advice are not significantly different. However, we are required to keep a record of the advice. You may request a copy of the Record of Advice (“ROA”) we keep up to 7 years after the advice was given.
How can I instruct Stockspot?
Apply for our services: You can apply for our MDA services by agreeing to and electronically signing your personalised MDA Contract. Upon receipt of your information we will need to authenticate your identity as part of our Know Your Client (KYC) and AML obligations and assess whether the MDA Service and an Investment Program are appropriate and suitable for you.
Make an investment: To make an investment you will need to deposit funds into your linked Cash Management Account (CMA). Stockspot will use these funds to invest into your Model Portfolio, and endeavor to invest within one business day of the funds being received. Typically if you transfer funds before 2pm AEST they will be invested for you the following business day. You can top up your investment by depositing funds into your CMA in the same way. For portfolios that are smaller than $10,000, Stockspot may ‘phase-in’ your portfolio until the value reaches $10,000.
Select your active account: You can select where new deposits will go. Choose either your Stockspot Model Portfolio or Stockspot Savings from the Transfer money - Deposit section of the Stockspot investment dashboard. This selection will stay active until you change it.
Transfer money: You can transfer money between your Stockspot Model Portfolio and Stockspot Savings from the Transfer money - move money section of the Stockspot investment dashboard. Keep in mind that this may involve selling some of your investments and realising capital gains or losses. We recommend you seek advice from your tax agent about the tax consequences first.
Make a withdrawal: Withdrawal requests can be made via the 'Transfer money' section of the Stockspot investment dashboard at www.stockspot.com.au. To receive a cash payment from your account, you are required to nominate a bank account into which all cash withdrawals are to be paid. You will need to authenticate the external bank account before we can authorise the first withdrawal. Withdrawals typically take 4-5 business days between when we receive the request and you receive the funds. This is because ASX listed investments settle on T+2 basis, which means that the funds only become available 3 days after we sell your investment portfolio and it then takes another day for us to transfer the funds to you. Please notify us if you would like us to leave the cash in your CMA account.
Update your profile: You can notify us of any change in your personal situation, risk profile or circumstances by updating your profile via the 'Investment profile' section of the Stockspot investment dashboard at www.stockspot.com.au.
Opt out: You can opt out of our services at any time by making a full withdrawal request via the 'Transfer money' section of the Stockspot investment dashboard at www.stockspot.com.au. The process can take up to a week if you would like us to sell your portfolio and transfer the cash to your personal bank account. Please notify us if you would like us to leave the cash in your linked CMA account. There are no exit fees payable by you.
How will you communicate with me?
You can track the performance of your portfolio by logging in to your account at www.stockspot.com.au.
Portfolio values are updated daily and new investments are reflected by the following day. Once logged-in, the Overview page gives you a snapshot of your Stockspot portfolio as at the previous close of business. Navigate to the Reports page if you would like to see how your portfolio has performed over a particular time period. Reports can be downloaded in Adobe (pdf) format or simply viewed online. We will also email you an annual investor statement each year.
Fees
| Type of fee | Details |
|---|---|
| Advice fees | $0 No initial or ongoing advice fees are payable. |
| MDA Service fee | Determined based on your investment balance. Stockspot does not charge a fee on money invested into Stockspot Savings: Bronze: 0% for the first 6 months, then $5 + GST per month Diamond: 0.03% + GST per month For the purpose of determining your fee tier, we will combine the balances of all Stockspot accounts that you hold. This fee is paid to Sanlam and deducted from your CMA monthly. |
| Entry fees | $0 No entry fees are payable |
| Transaction or brokerage fees | $0 Transaction costs are included in the MDA Service fee. |
| Performance fees | $0 No performance fees are payable |
| Exit fees | $0 No exit fees are payable |
Total fees payable to Sanlam on a $50,000 portfolio would be $300 +GST per year.
This equates to 0.60% of your portfolio balance per year +GST and includes:
- Ongoing investment advice from Stockspot;
- Portfolio implementation and execution;
- All portfolio rebalancing;
- Audit and Compliance of the MDA Service;
- Portfolio reporting accessed via www.stockspot.com.au
MDA Service fee
The maximum MDA Service fee under the “Bronze” fee tier is $5 per month +GST ($60 +GST per year) or 0.05% of your portfolio value per month +GST (0.60% +GST per year) under the “Silver” fee tier. This fee is paid to Sanlam as the MDA Operator.
Remuneration of Stockspot
External service providers to this MDA Service including Execution, Cash Management, Reporting, Audit and Compliance Services are paid from the fees collected by Sanlam. Once all these costs have been deducted, Stockspot may be paid between 20% to 100% of net fees collected by Sanlam.
ETF management fee
ETF management fees are charged by each fund issuer and included in the traded unit price. On a portfolio-weighted basis the ETF management fees are typically 0.26% to 0.28% per Stockspot Model Portfolio. This fee is not paid directly by you but does impact the portfolio performance.
Staff remuneration and benefits
Stockspot staff are remunerated based on salary (including bonuses) and may own equity and therefore participate in profits earned in relation to the Stockspot business.
Details of associations or relationships
In order to provide our services as an Adviser and MDA Manager, Stockspot has relationships with Sanlam (the MDA Operator and AFS License holder), providers of Execution services, Cash Management Account (CMA) services, Online Identification services and Portfolio Reporting services. Stockspot and Sanlam have chosen these external Service providers because they are the most suitable for this MDA. The commercial relationships Stockspot and Sanlam have with external Service providers in no way conflicts with the provision of financial services to you.
Stockspot does not receive any financial incentives from external Service providers or the ETF issuers. Any rebate Stockspot receives on cash amounts invested with the CMA providers will be rebated to you. Stockspot does not pay commissions to third parties.
Outsourced providers
| Desktop Broker | Trade execution and clearing/settlement |
| Class Limited | Administration and reporting |
| Macquarie Bank | Cash Management Account services |
| VIX Verify | ID verification services |
| AWS | Secure server |
| KMB Business Advisers and Chartered Accountants | Audit services |
Conflicts of interest disclosure
Sanlam, Stockspot, employees thereof and individuals at ‘‘arms length’’ to Stockspot and Sanlam may also hold MDAs with Sanlam. In an attempt to mitigate potential conflicts of interest arising out of Spilt fill allocations (if any) when ‘Bulk ordering’, the following allocation process is adopted by Stockspot:
- Buy order fills: Best fills in order of lowest account number to highest number;
- Sell order fills: Best fills in order of highest account number to lowest account number
By carrying out fill allocations as outlined above, Sanlam, Stockspot, employees thereof and account holders at arms length to Stockspot (if any) should receive no advantage or disadvantage in relation to any other MDAs in terms of price fill allocations. Should Stockspot become aware of any other conflict of interest or association that might impact its ability to act in the Client’s best interest, it will immediately inform the client of such conflict or association.
Dispute resolution
Stockspot provides a dispute resolution service to all of its clients. This obligation is a key tenet of the consumer protection principles of the Australian Financial Services Licensing system. If you have a complaint about any services you should:
- Contact Stockspot by phone or email to explain your situation and concerns. Stockspot will do everything possible to resolve your issue promptly;
- If this does not resolve your issue, put your complaint in writing addressed to the Compliance Manager, Sanlam at compliance@sanlamprivatewealth.com.au where it will be objectively considered and discussed with you and Stockspot with a view to be settled as soon as possible to your satisfaction; and
- If an issue has not been resolved to your satisfaction, you can lodge a complaint with the Australian Financial Complaints Authority, or AFCA. AFCA provides fair and independent financial services complaint resolution that is free to consumers.
Website: www.afca.org.au
Email: info@afca.org.au
Telephone: 1800 931 678 (free call)
In writing to: Australian Financial Complaints Authority, GPO Box 3, Melbourne VIC 3001
Professional Indemnity Insurance
In accordance with Regulatory Guide RG126 and Section 912B of the Corporations Act 2001, Sanlam has Professional Indemnity Insurance in place, which covers the work done by its representatives including Stockspot.