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 according 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 have applied our principles of diversification and risk management to meet your investment needs.
With a MDA Service, you will be the beneficial owner of the portfolio and have the ability to see the exact composition and value of your portfolio at any time (via our secure online service).
In order to provide you with our MDA Services you will need to enter into a ‘MDA Contract’. This MDA Contract includes a Statement of Advice and Investment Program that is prepared in accordance with the requirements in Division 3 of Part 7.7 of the Corporations Act.
The Statement of Advice and Investment Program include the following information:
Once the MDA Contract is in place, Sanlam and Stockspot can act on your behalf to implement and manage your Investment Program without requiring ongoing authorisation from you each time a change is made. Funds contributed to your MDA will be invested in accordance with the Investment Program included in this MDA Contract. Sanlam and Stockspot will act within the agreed terms of this MDA Contract and the Investment Program at all times unless otherwise agreed with you. You can terminate the MDA Contract at any time by sending an email from your registered email to firstname.lastname@example.org. The process can take up to a week and there are no exit fees at all.
To open an MDA a minimum investment of $2,000 AUD is required. The initial investment should be deposited into the Cash Management Account (CMA) we set-up for you. Additional investments can smaller however we will may phase-in your investment portfolio in stages.
For portfolios less than $10,000, we phase-in each asset class instead of buying all of the ETFs with each investment you make. This helps to ensure that all investments are made in ‘marketable’ denominations under ASX rules. During the phase-in period, our investment engine combines assets to balance the risk versus return according to your investment profile. By the time your portfolio reaches $10,000, you will own all of the ETFs as part of your Stockspot portfolio. We recommend that you target an investment balance of at least $10,000 within 12 months to ensure that you achieve the full diversification benefits of your Model Portfolio as soon as possible.
|Type of fee||Details|
|Initial advice fee||$0|
No initial advice fee is payable.
|Ongoing advice fee||Clients with balances between $0 and $49,999: Free|
Clients with balances $50,000 of greater: $50 + GST per year
Paid to Sanlam. Deducted from your CMA.
|MDA Service fee||Determined based on your investment balance:|
Bronze: 0% for the first 6 months, then $6 + GST per month
New clients that invest $10,000 or less.
Silver: 0.06% + GST per month
Clients with balances between $10,000 to $49,999.
Gold: 0.05% + GST per month
Client with balances between $50,000 to $499,999.
Platinum: 0.04% + GST per month
Clients with balances above $500,000.
Paid to Sanlam. Deducted from your CMA monthly.
For the purpose of determining your fee tier, we will combine the balances of all Stockspot accounts that you hold.
No entry fees are payable
|Transaction or brokerage fees||$0|
Transaction costs are included in the MDA Service fee. We do not charge any additional transaction costs or brokerage.
No performance fees are payable
No exit fees are payable
Total fees payable to Sanlam on a $50,000 portfolio would be $350 +GST per year.
This equates to 0.70%of your portfolio balance per year +GST and includes:
The initial advice provided in this SOA is at no cost to you. If you would like to proceed with this advice, you will be charged $50 +GST per year for ongoing investment advice including an annual review of the suitability of your Investment Program after you make your first investment. This fee is paid to Sanlam.
This fee is waived for clients who have invested less than $50,000 (‘Bronze’ and ‘Silver’ fee tier)
The maximum MDA Service fee is 0.06% of your portfolio value per month +GST (0.72% +GST per year) under the “Bronze” fee tier. This fee is paid to Sanlam as the MDA Operator.
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 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 0.20% to 0.32% per Stockspot Model Portfolio. This fee is not paid directly by you but does impact the portfolio performance.
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.
Under the MDA, you will hold legal title to your portfolio assets and authorise Stockspot as the MDA Manager to make investment decisions based on an investment strategy. In addition to the above Stockspot will be your investment Adviser, i.e. responsible for issuing the combined Investment Program and Statement of Advice to you and assessing whether the MDA is appropriate for you taking into consideration your relevant personal circumstances.
As the MDA Operator, Sanlam Private Wealth has discretion over selecting Service providers to the MDA including Cash Management Account (CMA) provider, Broker and the provider of Reporting and Audit Services. Sanlam also supervises compliance of the MDA Service.
The Execution and Clearing Broker is responsible for providing Execution and Clearing services to you and holding your funds. The Execution and Clearing Broker will be acting under their own AFS License when providing these services to you. There are no additional fees or charges applicable to the Execution and Clearing broker services within this MDA service. Please refer to the Execution and Clearing Broker Client Service Agreement including FSG and Terms and Conditions for more information about fees and charges applicable outside of this MDA.
The Cash Management Account (CMA) provider is responsible for providing a cash management account for you. The CMA is used to fund your investment purchases and credit dividends, interest and the proceeds from investment sales. Your cash management account is also used to pay fees. The CMA provider will be acting under their own AFS License when providing these services to you. There are no additional fees or charges applicable to the CMA provider within this MDA service. Please refer to the CMA provider FSG for more information about fees and charges applicable outside of this MDA Contract.
The Portfolio Reporting service provider is responsible for providing portfolio reporting services to you. These services are accessed via www.stockspot.com.au. There are no additional fees or charges applicable to the portfolio reporting services within this MDA.
As the MDA Manager, Stockspot has authority over how each MDA Model Portfolio will be operated. These discretions are limited to;
Each Stockspot Model Portfolio has a target asset allocation. Since investment grow at different rates, your actual investment allocation will drift from your target allocation over time. When this happens, Stockspot will rebalance your portfolio so that your investments are in line with the target asset allocation identified in your Investment Program. Note that rebalancing is assessed on an individual client level given that the timing of your initial investment influences your ongoing asset mix. We also review the Stockspot portfolio weightings annually and constituent ETFs periodically based on our ETF investment criteria. Our investment methodology is explained in more detail in our investment agreements.
There are a number of benefits associated with investing through this MDA Service.
Access to professional investment management: You gain access to professional investment management expertise through a range of Stockspot Model Portfolios.
Retaining ownership: Under this MDA Service you retain legal ownership of the investments in your account. The investments that form part of the Model Portfolios you invest in are held by you. This means that you legally own those investments and you retain the right to all income and gains relating to those investments.
A tax efficient structure:Because you retain legal ownership of the investments, management of your tax position can be more efficient when compared to other forms of investment through managed funds or unit trusts. Your tax management can be more efficient because;
Compared to a typical managed fund offered through an adviser on a WRAP platform, this MDA has the advantages of: lower fees, lower portfolio turnover, greater flexibility & transparency including daily valuation, and the benefits of beneficial ownership including reduced counterparty risk and potential tax efficiency benefits.
Compared to a Do-It-Yourself investment strategy, this Stockspot Model Portfolio has the benefit of strategic asset allocation and rebalancing which enables you to potentially achieve a better risk versus reward profile with less paperwork & lower transaction costs.
In Australia, strategic asset allocation has previously been available only to wealthy investors through financial advisers. Typically, those advisers charge high annual fees and require you to have hundreds of thousands of dollars invested. By implementing a model-based strategic asset allocation model via a MDA Service, Stockspot is able to offer a sophisticated investment management service at lower cost.
It is important to understand that, even with a sensible diversified investment strategy and appropriate time horizon, investing always involves some risk. 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 this MDA Contract, the PDS documents for each ETF 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 underlying investments within the MDA, which are outlined in the relevant PDS for each ETF. You should carefully consider the risks of each ETF 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 the 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.
A MDA may not be suitable for you if it you have provided limited or inaccurate information relating to your relevant personal circumstances and it may cease to be suitable if your relevant personal circumstances change. It is therefore important that that you notify us of any changes so our advice is always accurate. You can notify us of any change in your personal situation, risk profile or circumstances by updating your profile on our website.
If you are considering selling an asset to invest, we suggest you seek advice from a tax agent as the tax consequences of selling assets or switching investments are not being considered in any recommendations or advice. Stockspot provides investment advice only and does not consider the potential benefits or disadvantages of making additional contributions towards your mortgage or superannuation rather than investing.
If you are a Trustee of a Self Managed Super Fund (SMSF), you are required by prepare and implement an investment strategy for your fund and review it on an ongoing basis. Before implementing any recommendations made by Stockspot, you will need to check that they are consistent with your SMSF investment strategy.