Financial Services Guide – Bruce Kluk

This financial services guide was prepared 18th February 2011 and issued by The Principal Edge Pty Ltd Trading as Principal Edge Financial

We intend that this FSG should assist you in determining whether to use any of the services described below. You should also be aware that you are entitled to receive a Statement of Advice whenever we provide you with any advice which takes into account your objectives, financial situation and needs. The Statement of Advice will contain the advice, the basis on which it is given and information about fees, commissions and associations which may have influenced the provision of the advice.

In the event we make a recommendation to acquire a particular financial product (other than securities) or offer to issue or arrange the issue of a financial product, we must also provide you with a Product Disclosure Statement containing information about the particular product which will enable you to make an informed decision in relation to the acquisition of that product.

You have the right to ask us about our charges, the type of advice we will give you, and what you can do if you have a complaint about our services. This Financial Services Guide (“FSG”) is intended to inform you of certain basic matters relating to our relationship, prior to us providing you with a financial service. The matters covered by the FSG include, who we are, how we can be contacted, what services we are authorised to provide to you, how we (and any other relevant parties) are remunerated, details of any potential conflicts of interest, and details of our internal and external dispute resolution procedures and how you can access them.
Key information is set out in answer to the questions below.

Before you obtain our advice

Question:Who will be providing the financial service to me?

Answer: The provider of the financial services is The Principal Edge Pty Ltd, T/A Principal Edge Financial Services, Level 3 Bay House, 2 Guilfoyle Ave. Double Bay NSW 2028. 

The Principal Edge Pty Ltd, T/A Principal Edge Financial Services is an Australian Financial Services Licensee, licence number 225029.

Question: Who is my Advisor? 

Answer: Your Advisor will be Bruce Kluk. He has attained the following qualifications:

Bachelor of Commerce; B. Comm. (Natal University);
Certificate in the Theory of Accountancy; C.T.A (Witwatersrand University); Chartered Accountant; CA (SA); Diploma of Financial Planning; DFP; Certified Financial Planner; CFP.

Question: What kinds of financial services are you authorised to provide me and what kinds of products do those services relate to?

Answer: We are able to offer you advice on personal risk management, wealth management and estate planning. In particular we are licensed to advise and deal in the following products:

• Deposit Products
• Government Debentures, Stocks and Bonds
• Life Insurance Investment Products
• Life Insurance Risk Products
• Managed Investment Schemes, including Investor Directed Portfolio Services (IDPS)
• Retirement Savings Account Products
• Listed and Unlisted Securities
• Superannuation
• Standard Margin Lending facilities

We focus on providing tailored financial solutions to the individual needs of our clients. We also seek to become a financial “coach” through on-going education and learning. At times and largely on an electronic basis, we will communicate with our clients providing more general advice.

We do not “monitor” individual portfolios on a day to day basis because our focus is not on the short term movements of asset prices. Rather we concentrate on fulfilling longer term needs of our clients by regular review. This process is thorough. We aim to meet with clients at least annually through a formal arranged meeting. This allows us to assess overall performance of the portfolio and address any changes that may have occurred in the interim period since the previous review.

Question: Who do you act for when you provide financial services to me?

Answer: I act for the licensee, namely The Principal Edge Pty Ltd T/A Principal Edge Financial Services.

Question: How will I pay for the service?

Answer: Our service will generally involve a written report known as a “Statement of Advice” (SOA). The payment for the preparation and presentation of the SOA will be by a fee discussed and agreed with you at our initial meeting. The amount of the payment will be a function of the time involved to prepare the SOA and the complexity of the advice contained within it. The minimum charge for a SOA is $5,000 plus GST.

Should you request us to proceed with the implementation of the plan; we will discuss an implementation and an on-going fee / commission basis with you as part of the SOA. You will have the choice of paying a fee that is charged directly to you, or agreeing to a commission being paid by the various providers directly to ourselves. The fee / commission basis will be calculated as a function of time, complexity and the amount of the investment. The fee / commission will be discussed and agreed upon before we commence any implementation work for you. Once agreed we will formalise the agreement through a written contract signed by both parties.

Question: Do you receive remuneration, commission, fees or other benefits in relation to providing the financial services to me and how is that commission calculated?

Answer:

• RemunerationI receive a salary from The Principal Edge Pty Ltd. Commission election. 2. The issuers of the investment products I recommend pay Principal Edge Financial Services an initial commission. The commission can vary depending on the product and issuer. It is in the range of between 0% and 5.5% and is based on your investment amount. This commission is paid by the issuer at the time that you make your investment. Similarly the insurance products I recommend pay Principal Edge Financial Services an initial commission. The commission can vary depending on the product and issuer. It is in the range of between 0% and 130% and is based on your first year’s insurance premium. This commission is paid by the issuer at the time that your insurance is accepted.
• Fee electionFor clients who elect a fee basis, an account will be prepared for you at the time of the implementation of the new business. The fee will be pre-agreed and is a function of time and the amount of the investment.
• On-going commissionThe issuers of the investment products I recommend pay an ongoing commission. The commission, which can vary depending on the product and issuer; is in the range of 0% and 1.1% and is based on your account balance. This commission is paid by the product issuer either monthly, quarterly or annually.The issuers of the insurance products I recommend pay an ongoing commission. The commission, which can vary depending on the product and issuer; is in the range of 0% and 33% and is based on your renewal premium. This commission is paid by the issuer upon renewal at the anniversary of the insurance policy.
• StockbrokingWhere the services of a stockbroker are required, Principal Edge Financial Services will receive between 0% and 50% of the brokerage amount you pay to the stockbroker.
• Specific AgreementWhere a specific agreement exists and a client is referred to us from a specified source, a fee of up to 25% of any resulting fee / commission will be paid to that source. Naturally a full disclosure of this “spotter’s fee” will be made to you in the SOA, and its existence will not impinge on you, or the fee / commission charged to you.
• Other BenefitsI am not aware of any other incentives that I may receive from any product issuer. From time to time we receive other non-monetary benefits from the companies with whom we write business. These include invitations to presentations, market updates, end of year functions, new product launches and other events on an ad-hoc basis.
• DisclosureThe exact amount of any fees, commissions, bonuses or incentives received either by me or The Principal Edge Pty Ltd will be included in the SOA that I will provide for you.
• Disclosure of Potential Conflict of InterestMacquarie Wrap Solutions (MWS) has established an administration rebate for their supporting Advisors. Principal Edge Financial Services (PEFS) is a user of MWS and became eligible for the administration rebate from January 2005. We intend to use this rebate to assist us in the processing of transactions and for the preparation of plans for the relevant clients.The criteria for eligibility being total accumulated balances across all PEFS / MWS clients exceeding $30 000 000 with an average account balance greater than $15 000 per client. If any of these criteria are not met in the future or if our agreement is terminated with MWS, we would no longer be entitled to the rebate.

The rebate of the MWS administration fee is 0.165%pa for accumulated balances from between $30m and up to $75m and 0.1925%pa from $75 to $150m. If we recommend a MWS facility to you and you invest in it, we will receive this additional rebate. However it will not impinge in any way on your investment. Where relevant the rebate will be disclosed in the Statement of Advice. The rebate applies only up to the first $50,000 invested in each investment within the portfolio.

Question: Do any relationships or associations exist which might influence you in providing me with the financial services?

Answer: No. Neither I, nor The Principal Edge Pty Ltd, nor Principal Edge Financial Services, have any relationships or association with any product issuer that could be expected to influence us in the provision of financial services.

When you receive our advice

Question: Will you give me advice which is suitable to my needs and financial circumstances?

Answer: Yes. To do so we need to find out your individual objectives, financial situation and needs before we recommend any financial products or services to you. You have the right not to divulge this information to us, if you do not wish to do so. In that case, we are required to warn you about the possible consequences of us not having your full personal information. You should read the warnings carefully.

Question: What should I know about any risks of the financial products or strategies you recommend to me?

Answer: We will explain to you any significant risks of financial products and strategies that we recommend to you. If we do not do so to your complete satisfaction, you should ask us to explain those risks to you. We will undertake to do so to enhance your understanding of all of the risks involved.

Question: What information do you maintain in my file and can I examine my file?

Answer: We maintain a record of your personal profile which includes details of your objectives, financial situation and needs. We also maintain records of any recommendations made to you. We are committed to implementing and promoting a privacy policy which will ensure the privacy and security of your personal information. A copy of our privacy policy is enclosed for your information.
If you wish to examine your file, you should ask us, and we will make arrangements for you to do so.

Question: Can I provide you with instructions and tell you how I wish to instruct you to buy or sell my financial products?

Answer: Yes. You may specify how you would like to give us instructions. For example, this may be in writing, by facsimile, or through other means.

Question: Do you provide me with on-going advice?

Answer: Yes. The regularity of your reviews is at your election. Where your circumstances have not significantly changed, we will provide the advice based on your initial Statement of Advice and maintain a “Record of Advice”. You may request a copy of your Record of Advice for up to 7 years after the advice has been prepared.

Question: How do I obtain a copy of the Record of Advice?
Answer: You may request a copy by telephoning our office on 02) 9363 2900, or by email, info@principaledge.com.au. Upon your request, we will send a copy of the Record of Advice to you.

If you have any complaints

Question: Who can I refer to if I have a complaint about the provision of the financial services provided by you to me?

Answer: We are members of the Financial Ombudsman Service (FOS). If you have any complaint about the service provided to you, you should take the following steps.

1. Contact us and tell us about your complaint.
2. If your complaint is not satisfactorily resolved within three days, please contact the Managing Director or put your complaint in writing and send it to us at the address noted at the beginning of this FSG. We will try and resolve your complaint quickly and fairly.
3. If the complaint can’t be resolved to your satisfaction you have the right to complain to the Financial Ombudsman Service (FOS). They can be contacted on 1800 780 808. This service is provided to you free of charge.

Stage 1 of the FOS process is where FOS facilitates discussions and negotiations between the parties. All relevant documents are exchanged and the issues in dispute are identified.

Stage 2 is conciliation and the parties come face to face with a conciliator from the FOS national panel. The role of the conciliator is to assist the parties to explore options for settlement of the dispute and to help parties to agree on their own outcome.

Stage 3 is where the independent adjudicator is requested to make a decision “on the papers” taking into account the relevant law, fairness and reasonableness. If you accept the adjudicator’s decision it is binding on the member.

If your concerns involve ethical conduct you may wish to consider raising your concerns in writing with the Financial Planning Association of Australia Limited (FPA). They can be contacted at PO Box 109, Collins Street West, Melbourne Vic 8007. The Australian Securities and Investments Commission (ASIC) also has a toll free call Info line on 1300 300 630 which you may use to make a complaint and obtain information about your rights.

Question: Do you have compensation arrangements in place?

Answer: Principal Edge Financial Services holds appropriate compensation arrangements under the Corporations Act in the form of Professional Indemnity Insurance which includes services provided by both current and former Representatives.