Financial Services Guide
This Financial Services Guide (FSG) is dated 1st November 2018 and is provided to you by Kimber Capital Pty Ltd (Kimber Capital, we, our, us) to inform you of the financial services provided by us and to comply with our obligations as the holder of an Australian Financial Services Licence (AFSL No 425278).
This FSG is meant to assist you to decide whether to use our services and to explain:
- 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 give
- 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
- how you can contact us
This FSG contains only general information about the services we offer. If you still have any questions after reading this FSG, please contact us. Our contact details are listed at the end of this document.
What other disclosure documents and statements will I receive?
In addition to this guide, if we provide you with personal advice or further assistance in selecting products or services having regard to your particular circumstances and needs, we will, where we are required to do so under the law, issue you with a Statement of Advice (SoA) that will set out the personal advice we have given you, including any recommendations we offer along with our rationale for our recommendations and information about any fees, commissions, associations or relationships which might influence the provision of that advice.
If we provide to you a SoA, we may provide further advice to you after we have given you a SoA. If we have not provided you with a record of the further advice you may request, either verbally or in writing, a record of further advice within 7 years (or as prescribed by law) of us providing the further advice.
Generally, where we arrange for the issue of a financial product to you, you will receive a Product Disclosure Statement (PDS) or other relevant disclosure documents that include information about the product so that you can make an informed decision whether to acquire the product. It would include any relevant terms, significant risks and costs associated with the supply of that financial product.
How you can instruct us and your obligations?
We will accept trade order instructions via telephone, email or facsimile. You must check and confirm with us that orders sent via fax or email, have in fact been received by us. You must review any confirmation or statement we send to you immediately upon receipt to ensure its accuracy and report any discrepancies to us. If you have opened a Managed Account with Kimber Capital you will be able to contact us by telephone, email or facsimile to provide instructions relating to your portfolio assets or any corporate actions.
Who are we and what services are we authorised to provide?
Kimber Capital is a privately owned boutique provider of wealth management services to retail and wholesale clients. Kimber Capital holds an Australian Financial Services Licence (AFSL) No 425278 which authorises us to provide general and personal advice on and deal in the following classes of financial products:
- deposits and payment products
- foreign exchange contracts;
- government debentures, stocks and bonds;
- managed investment schemes including IDPS;
- MDA Services;
- retirement Savings Accounts (RSA) products;
- Standard Margin Lending Facilities; and
- international equities
We act under our own AFSL when we provide services to you. We offer the following services to retail and wholesale clients:
- Managed Account – Where Kimber Capital makes the trading decision for the client pursuant to an agreed investment strategy.
- Advice provided to retail clients under an SOA – Where Kimber Capital provides personal advice to clients and issues a SOA to the client.
- General Advice provided to clients – Where Kimber Capital provides general market information, commentaries and trade recommendations to retail and wholesale clients.
- Advisory and Dealing Services – where Kimber Capital executes client trades via market participant Pershing Securities Australia Pty Ltd. Kimber Capital’s office in Australia is located at 133 Alexander St Crows Nest NSW 2065. Kimber Capital ensures their clients are provided with qualified and professional financial services by only using the services of reputable service providers.
What information do we offer to you, as our client?
We can offer you factual market data and information, including general advice, regarding those products and services our AFS Licence permits us to provide. The products on which we may provide this information include:
- Securities traded on approved exchanges around the world
- Options on securities traded on approved exchanges around the world
- Over-the-counter derivatives such as Contracts for Difference (CFDs)
- Foreign Currencies (margin trading and physical settlement)
- Client education seminars (product awareness and trading skills)
What are our responsibilities and what type of advice do we give?
General advice and information regarding financial products and services is provided to you when we do not take into account your particular objectives, financial situation or needs and because of that you should, before acting on the advice, consider the appropriateness of the advice having regard to your objectives, financial situation and needs. Personal advice is provided when we take into account one or more of your objectives, financial situation and/or needs. In order to do this, you will be required to answer a number of questions relating to your financial position and risk profile. Any material changes in your circumstances must be disclosed to Kimber Capital as they occur so that Kimber Capital may assess whether the advice provided is suitable for you. It should be noted that clients who open an account under which we only provide general advice may be requested to provide some information relating to their financial circumstances and risk profile. This information is collected so that Kimber Capital can receive some reassurance that you will be able to finance any trading that you enter into and that your attitude to risk is comparable to that of the financial products you intend to trade.
What do you need to know about the Managed Account Service?
If we arrange for you to open a Managed Account, with a third party service provider, you will need to familiarise yourself with all the information included in the FSG and the PDS given to you by the third party service provider. As the Investment Manager, Kimber Capital will be making the trading decisions for you pursuant to the Investment Program issued to you by the third party service provider. Each party will be acting under its own AFS Licence when providing these Services to you.
If you choose to open a Managed Discretionary Account (MDA), Kimber Capital will be the MDA provider. For more details about the MDA Service offered by Kimber Capital please refer to the Annexure titled ‘Managed Discretionary Account Services’.
Details of Associations or Relationships we have with product issuers or related body corporates that may influence us when providing services to you?
Kimber Capital has a relationship with Pershing Securities Australia Pty Ltd to provide trade execution capability to our clients for ASX equities and derivatives trades, and to clear and settle all such trades. Kimber Capital has a relationship with Integrated Portfolio Solutions Pty Ltd (IPS) to provide portfolio administration services to our clients. Kimber Capital also has relationships with other corporate issuers of financial products. We will advise you of these relationships when providing financial product advice. We will also advise you of any fees we receive from these relationships. These relationships in no way influence the provision of financial services by Kimber Capital to you.
The costs, remuneration and other benefits that may be received by us, our employees and others?
The information in this section is subject to change and does not include information in relation to taxes or duties that you may be required to pay in relation to an investment. Unless otherwise stated, all fees, charges, commissions and benefits disclosed in this FSG are exclusive of the Goods and Services Tax (GST).
Advisory and Dealing Services
If you have opened a non-discretionary account with Kimber Capital (i.e. you are responsible for making your own investment decisions), you may be required to pay a commission or other charge to the Market Participant appointed by us. The Market Participant will rebate a portion of the fee charged to Kimber Capital. The total charges will not exceed the higher of $75 or 1.25% of the trade value.
Kimber Capital may receive fees of up to 5% on share placements and initial public offerings.
International share costs
The commission you are charged is the same if you transact in international shares. However, we may incur additional costs through third parties who provide custody, execution and clearing and settlement services to us in respect of your transactions which we may pass on to you. We will disclose any differences in the details of charges to you.
Managed Accounts via third party service provider
If you have opened a Managed Account via Kimber Capital, the Application form or Statement Of Advice provided to you will define the fees that you are liable for. Kimber Capital will receive up to 1.5% per annum of the funds under management. This may be subject to a minimum fee per account. These rates are indicative rates only as the fee structure is different for different Managed Accounts. All fees, commission and charges are subject to change.
Managed Accounts via MDA Services issued by Kimber Capital
If you have opened a Managed Discretionary Account with Kimber Capital then you may be subject to the following fees:
- Commissions charged by the third party service provider as the case may be
- MDA Fees which are charged by Kimber Capital and comprise of an Administration Fee and a Performance Fee.:
– Administration Fee – can be a combination of an upfront entry fee (ie. a percentage of account opening balance) and/or annual ongoing account fees (ie. a percentage of end of quarter account balance).
– Performance Fee – charged on profit made during the quarter (ie. a percentage of profit generated depending on the rate of return for the quarter).
The rates that apply to each MDA are detailed in the tables included in the Annexure titled ‘Managed Discretionary Account Services’.
Our employees may in turn be remunerated a portion of the fees commission paid by you. Their remuneration is included in the commissions discussed above. Where your business has been referred to Kimber Capital or your trade instructions require the use of a third party, Kimber Capital may be required to share a percentage of the commission or other charge with other parties.
Payments to directors, employees, representatives, authorised representatives and referral agents will only be paid if they are authorized by you.
If you have a complaint, how it will be dealt with?
If you wish to make a complaint about the service or advice you have received, the Managing Director (Mr Chris Kimber) can be contacted on (02) 9900 9200 or by email (see details below) Kimber Capital has a formalised client complaint resolution procedure. All complaints are reviewed and investigated by our Compliance Officer. If you make a complaint, our first response will be to contact you to discuss the complaint and to register a formal record of such complaint. We will try to resolve your complaint quickly and fairly.
If, despite our best efforts, you believe your complaint has not been satisfactorily dealt with, we offer clients the use of an independent industry arbiter. Kimber Capital has agreed not to contest a final resolution from the independent industry arbiter.
You can contact the independent industry arbiter by writing to:
- Financial Ombudsman Service Australia if lodged before 1 November 2018
GPO Box 3
Melbourne VIC 3001
Toll Free: 1800 367 287
- Australian Financial Complaints Authority if lodged on or after 1 November 2018
GPO Box 3
Melbourne VIC 3001
Toll Free: 1800 931 678
In accordance with Regulatory Guide RG126, Regulatory Guide RG179 and Section 912B of the Corporations Act 2001, Kimber Capital has Professional Indemnity Insurance in place which covers the work done for it by its representatives and employees.
For what purpose do we use your contact data.
Privacy is an important issue for us and we are committed to ensuring full compliance with Privacy Act requirements.
How you can contact us?
Telephone: (02) 9900 9200
Facsimile: (02) 8209 4855
Mail: PO Box 6219 North Sydney NSW 2059
In person: 133 Alexander St, Crows Nest NSW 2065
Annexure: Managed Discretionary Account Services
What is a MDA Service?
A MDA service is a managed investment scheme and a facility for making a financial investment that has the following key features:
- client’s give to the MDA Operator i.e. Kimber Capital, access to money or money’s worth (client contributions);
- Kimber Capital has the discretion to invest in financial products using client contributions without prior reference to the client for each transaction;
- each client agrees with Kimber Capital that assets derived directly or indirectly from that client’s contributions are managed as a discrete portfolio belonging to the client; and
- each client has an understanding that they will derive benefits from the MDA service, including benefits from Kimber Capital’s expertise in investment selection and other services offered as part of the MDA service.
Either the Adviser or the MDA Manager appointed by Kimber Capital (as disclosed in the MDA Contract that you will sign with Kimber Capital) will be responsible for reviewing the Investment Program once every 13 months.
Where your relevant personal circumstance change you will be responsible for informing either Kimber Capital, the MDA Manager or the Adviser (as the case may be) and the Adviser or the MDA Manager appointed by Kimber Capital (as disclosed in the MDA Contract that you have signed with Kimber Capital) will review the Investment Program and MDA Contract to ensure it remains suitable for you.
What is the MDA Contract?
In order to provide you with MDA services you need to open an MDA. To open an MDA you must enter into an “MDA Contract” with Kimber Capital before the MDA service can be provided.
The MDA Contract will include an Investment Program that is prepared in accordance with the requirements in Division 3 of Part 7.7 of the Corporations Act (ie. provision of personal advice to retail clients and Statement of Advice) and Division 2 of Part 7.7A of the Corporations Act (ie. best interest obligations). The Investment Program will contain the following information:
- the nature and scope of the discretions Kimber Capital will be authorised and required to exercise under the MDA Contract and any investment strategy that is to be applied in exercising those discretions;
- any significant risks associated with the MDA Contract;
- the basis on which Kimber Capital considers the MDA Contract to be suitable for the client; and
- warnings about the MDA Contract, such as:
– it may cease to be suitable for the client if the client’s relevant circumstances change; and
– it may not be suitable for the client if the client has provided Kimber Capital with limited or inaccurate personal information about the client’s relevant circumstances.
Who holds the legal title to your portfolio of assets under an MDA?
The client opens an MDA in their own name and thus, holds the legal title to the portfolio of assets. The MDA service provided by Kimber Capital does not include custodial or depository services.
Your funds and assets will be held with the Third Party Service Provider in either a Clients’ Segregated Account or a Trust Account. The Third Party Service Provider nominated by Kimber Capital provides dealing services to the Client, which includes execution and clearing services and holding client funds.
There are significant risks associated with an investment via an MDA, of which not all can be outlined. Investment via the MDA may not be suitable for all investors. There can be no assurance that the MDA will achieve its investment objectives. Each prospective investor should carefully review the MDA Contract and carefully consider the risks before deciding to invest. Accordingly, in evaluating the merits and suitability of an investment in the MDA, careful consideration should be given by prospective investors to the following risk factors. This section does not purport to be an exhaustive list of the risks involved in investing in the MDA.
- General Economic Conditions and Market Risks – The MDA’s operating and financial performance may be influenced by a variety of general domestic and international economic factors and business conditions which are outside the control of the MDA Provider and the MDA Manager. These include changes in the inflation rate, commodities prices, exchange rates, interest rates, the government and government fiscal, monetary and regulatory policy, natural disaster and acts of terrorism.
- Risk associated with selling options – When trading options, the buyer of the option has the right to decide whether or not to exercise the option contract and at times when the options contract is exercised. Therefore, in a rising market the seller of a call option may be obligated to sell the underlying financial product at less than the current market value whilst in a falling market the seller of a put option may be obligated to buy the underlying financial product at more than the current market value.
- Industry Risk – There are a number of industry risk factors that may affect the future operational performance of the MDA. These factors are outside the control of the MDA Provider and the MDA Manager. Such factors include increased regulatory and compliance costs and variations in legislation and government policies generally.
- Financial Market Volatility – A fall in global or Australian financial markets or the rapid change in the value of the Australian dollar against other major currencies may discourage investors from investing in financial markets. This may have a negative effect or a positive result on the price of the financial products in the MDA, however these factors are taken into account when taking a trade.
- Leverage Risk – Where possible by law, your MDA may be operated based on a notional value, i.e. leverage is being used, either through various financial instruments or borrowing capital, to increase the size of your MDA. If leverage is used to make an investment and the market moves against your position, your loss is much greater than it would have been if the investment had not been leveraged. In general, leverage magnifies both gains and losses.
- Liquidity Risk – The MDA may invest in markets that are volatile and which may become illiquid. Accordingly, it may be impossible (in the event of trading halts) or expensive for Kimber Capital to liquidate positions against which the market is moving. Alternatively, it may not be possible in certain circumstances for a position to be initiated or liquidated promptly (in the event of insufficient trading activity in the relevant financial product).
- Exchange Rate Risk – Investment in a MDA must be converted to Australian Dollars. Accordingly, investors other than Australian nationals should be aware that exchange rate fluctuations could cause the value of the investment to diminish or increase. In addition, the price of any financial products traded on international markets and, therefore, the potential profit and loss therein, may be affected by any variance in the foreign exchange rate between the time the order is placed and the time it is liquidated, offset or exercised.
- Diversification – the MDA may be less diversified than portfolios operated by other investment managers, as the MDA is likely to be concentrated in a limited number of financial products, to maximize the investment strategy. The fundamental and technical performance of a financial product and its associated factors are taken into consideration when trading and investing.
- Performance of Other Asset Classes – Good performance (or anticipated performance) of other asset classes can encourage individuals to divert money away from financial markets. This may have a negative impact on the price of the financial product. At times, measures are taken to insure the financial product by buying insurance in the form of put options.
- Margins and Financial Products – The Client could sustain a total loss of initial margin funds that the Client deposits with the Third Party Service Provider to establish or maintain a position in the derivatives or foreign exchange market. If the derivatives or foreign exchange market moves against the Client’s position, the Client may be required, at short notice, to deposit with the Third Party Service Provider additional margin funds in order to maintain the Client’s position. Those additional funds may be substantial. If the Client fails to provide those additional funds within the required time the Client’s position may be liquidated at a loss and in that event the Client will be liable for any shortfall in its account resulting from that failure.
- Size of MDA – The size of the MDA will determine the allowed diversity and risk profile of the MDA. Effective risk management depends on a range of factors, including insurance of these positions with put or call options and other factors, including a defined and successful Investment Program.
- The MDA Provider and MDA Manager – The profitability of the MDA is dependent on the MDA Provider’s and MDA Manager’s successful implementation of the investment strategy set out in the Investment Program. There can be no guarantee that the investment strategy will be realised.
- Licensing Requirements – The ability of Kimber Capital and the MDA Manager to continue to manage the MDA in accordance with this MDA Contract and the Corporations Act, is dependent on Kimber Capital maintaining its AFS Licence. Maintenance of its AFS Licence depends, among other things, on Kimber Capital, its Representatives, its Authorised Representatives and the MDA Manager continuing to comply with its licence conditions and the Corporations Act.
- Tax Considerations for Investors – There may be tax implications arising from the receipt of profit from the MDA. Applicants should carefully consider these tax implications and obtain advice from an accountant or other professional tax adviser in relation to the application of tax legislation.
- No guarantee can be given in respect of the future earnings of the MDA or the capital appreciation of the client’s investments. The price of investments that the MDA Manager has purchased in the MDA can fall as well as rise over time. Further, no assurance can be given that the strategies employed by the MDA Provider or the MDA Manager in the past to achieve attractive returns will continue to be successful, or that the return will be similar to that achieved in the past.
- Kimber Capital makes no representation as to any return that investors will earn via the MDA and there can be no assurance that the target performance information, set out in the Investment Program, will be in any respect indicative of how the MDA will perform (either in terms of profitability or low correlation with other investments) in the future.
- Despite achieving the track record attached or outlined as a schedule to the MDA Contract or on Kimber Capital’s website, the said track record is un-audited and not representative of any one client’s account.
- The performance of the MDA will be affected by charges relating to the investments. Typically, high portfolio turnover may result in correspondingly high transaction costs and the exact amount of brokerage and related transaction costs that will be incurred will depend upon a number of factors, including the nature and frequency of the market opportunities presented, the size of transactions and the transaction rates in effect from time-to-time. Refer to information in the Disclosure of Fees and Commissions outlined in the Statement of Advice – Investment Program.
- The placing of contingent orders (such as a “stop-loss” order) may not always limit the Client’s losses to the amount the Client may want. Market conditions may make it impossible to execute such orders.
- Kimber Capital 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, Kimber Capital may not perform as anticipated, which could result in losses.
- Identification and exploitation of the investment objective to be pursued by Kimber Capital involves a high degree of uncertainty. No assurance can be given that Kimber Capital will be able to locate suitable investment opportunities in which to deploy all of the allocated assets.
- Kimber Capital may, on varying occasions, use ‘‘bulk ordering’. There is risk that the volume of orders may significantly increase the likelihood of ‘‘split fills’’. Accordingly some accounts will receive prices that are more favourable/ detrimental (whatever the case may be) in comparison to other accounts.
- As MDA investing is not carried out on a ‘‘pooled’’ basis, but rather is separated as discrete portfolios, individual account balances and portfolio valuations may vary substantially in comparison to other MDAs.
- Inaccurate and incomplete relevant personal information provided by the Client may result in investments in financial products that are not suitable to the Client’s needs.
Outsourcing arrangements under the MDA Service
Kimber Capital has outsourcing arrangements in place with third party service providers that are responsible for the provision of dealing services which includes execution and clearing services and holding client funds. The third party service provider that will be responsible for providing these services to you is dependent on the MDA you invest in and is disclosed in the Fee and cost tables at the end of this FSG. MDA clients are required to enter into a separate arrangement with Kimber Capital with respect to these services.
Kimber Capital may also outsource certain administrative functions on an adhoc basis to reputable service providers. Where relevant the name of your administration service provider will be disclosed in the MDA Contract.
Prior to engaging with any third party service provider, Kimber Capital will assess the service provider on their merits and reputation, and will consider matters such as:
- their size and reputation in the market;
- their duration of operation and their track record;
- their financial stability; and
- any other factors deemed relevant at the time.
Kimber Capital, generally, only deals with reputable third parties known to deliver professional services to their customers.
When we outsource functions to a third party, we establish a contract, we monitor the performance of that third party closely by observing the performance of their service, and we monitor their services against the agreed contractual services.
Managed Discretionary Account Fees and Other Costs
Did you know? Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns.
For example, total annual fees and costs of 2% of your investment balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features, such as investment performance or use of an MDA Service, justify higher fees and costs.
To find out more: If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (www.moneysmart.gov.au) has a managed funds fee calculator to help you check out different fee options.
The following information shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the funds and assets held in your MDA.
Kimber Capital does not provide tax advice and you should obtain advice from an accountant or other professional tax adviser in relation to the application of tax legislation.
You should read all the information about fees and costs because it is important to understand their impact on your investment.
The following tables set out the fees and costs for the Kimber Capital MDAs.
|Type of fee or cost||Amount||How and when paid|
|Fees when your money moves in or out of the managed investment product|
The fee to open your investment
The fee on each amount contributed to your investment
The fee on each amount you take out of your investment
The fee to close your investment
The fees and costs for managing your investment
|up to 1.1% per annum||Payable in arrears on the last business day of the quarter and will accrue daily between such dates based on the balance of the account at the end of the quarter.|
The fees and costs relating to research material used by MDA Manager
|up to 0.22% per annum||Payable in arrears on the last business day of the quarter and will accrue daily between such dates based on the balance of the account at the end of the quarter.|
The fee for changing investment options
The fee on new net profit within a quarter
The fees charged by the Third Party Service Provider for the provision of dealing services
|Refer to section titled ‘The costs, remuneration and other benefits that may be received by us, our employees and others’||Per transaction|
- This fee includes an amount payable to an adviser.
For details of fees and costs relating to the other MDAs offered by Kimber Capital please refer to the end of this document.
Example of MDA Fees
The following table provides an example of how the fees and costs in the Kimber Capital MDA can affect your investment over a one year period. You should use this table to compare this product with other MDA Services.
|EXAMPLE||BALANCE OF $50,000 AND NO CONTRIBUTIONS DURING THE YEAR|
|Management fee||1.1% per annum||Kimber Capital charges the Management Fee on a quarterly basis, based on the Net Portfolio Value at the end of the quarter (ie. cash and market value of all financial products held in the account).
The Annual Management Fee would be $583.00.
The Annual Research Fee would be $116.60.
|Research fee||0.22% per annum|
Additional explanation of fees and costs
The Management Fee is calculated based on the Net Portfolio Value at the end of the quarter and accrues daily between such dates. It is deducted the following month.
When you close your account, the Management Fee will be calculated on the Net Portfolio Value at the closure date on pro-rata basis and deducted from the account prior to the account closure being processed and finalized.
The fee is quoted inclusive of GST.
As part of the MDA Service you will be charged Transaction Fees (which includes commissions and brokerage charged by the Third Party Service Provider) each time the MDA Manager trades on your behalf (ie. buys or sells a financial product for you).
These costs will depend on the frequency of trading within the MDA, which is determined by the investment strategy included in the Investment Program.
Further information about the Transaction fees, can be found in the section titled ‘The costs, remuneration and other benefits that may be received by us, our employees and others’.