Purpose of the Dover Client Information Policy
The Dover Client Information Policy (the Policy) incorporates into your statement of advice key information the Australian Securities and Investments Commission requires advisers to provide to clients under the Corporations Act and various regulatory guidelines concerning the content and format of statements of advice.
The Policy requires advisers to act in the client’s best interests at all times, to provide advice that is appropriate to the client’s individual circumstances, which prioritises the client’s interests and otherwise complies with the Corporations Act and other relevant laws, and financial planning ethical standards.
Additional terms of your contract
The Policy sets out your adviser’s obligations to you as its client and your obligations as a client to your adviser.
These mutual obligations form part of your contract with your adviser.
Invitation to contact Dover’s Responsible Manager
You are invited to contact Dover’s Responsible Manager, Terry McMaster, should you wish to complain about any aspect of Dover’s service to you, should you have any concerns regarding the Policy and how it applies to you, should you require a copy of the (withdrawn) Dover Client Protection Policy or should you require more information regarding the withdrawal of the Dover Client Protection Policy.
You can contact Terry McMaster at email@example.com
Dover Client Information Policy
Dover Financial Advisers Pty Ltd, its director and staff and each adviser (“Dover”) are actively committed to a code of ethics designed to achieve best practice in financial planning by emphasizing the rights and entitlements of Dover clients at all times.
Observing a formal code of ethics is a mark of a professional person. The Dover code of ethics includes compliance with the Corporations Act, ASIC’s regulatory guidelines and similar laws, and extends to a higher code of behavior designed to enhance the standing and perception of Dover with the public and within the financial planning profession.
“Dover Ethics” is part of each Dover adviser’s contract and is an essential part of each adviser’s practice philosophy.
Dover advisers must observe the Policy all times and accept it as part of the conditions of each client contract.
Dover advisers must observe the Code of Professional Practice published by the Financial Planning Association of Australia as if they were members of this Association. Without limiting the generality of this requirement this includes:
- Dover advisers will do all things necessary to ensure the best possible results for each client at all times.
- Dover advisers will observe best practice principles in all dealings with their clients.
- Dover advisers will not place themselves in a position where it has an undisclosed or unresolved conflict of interest.
- Dover advisers will ensure their advice is appropriate to the client at all times.
- Dover advisers will always act in the client’s best interests.
- Dover advisers exemplify integrity and fairness in their client relationships. Dover advisers accept the trust placed in them by their clients, and honor that trust by displaying integrity, fairness, honesty, candor and personal integrity at all times.
- Dover advisers will not do, or fail to do, anything that will breach the Policy.
- Dover advisers will show professional courtesy and respect to all clients, other professional advisers, professional bodies and regulatory authorities at all times, and will do all things necessary to maintain and improve the status and standing of financial planning as a profession.
- Dover advisers observe all laws and regulations applying to financial planning and in particular the financial planning process and the preparation of statements of advice and similar documents for clients.
- All Dover client information will be secure and access controlled in accordance with professional standards of complete confidentiality and privacy laws and regulations.
All Dover advisers will provide copies of statements of advice, fact finders and related documents to Dover to allow it to satisfy the requirements of section 912A of the Corporations Act and ASIC’s requirements regarding the retention of financial advice records.
Dover advisers commit to a high standard of continuing professional education and training including private reading and research, regular attendance at technical and professional training and constant study of the Corporations Act rules and regulations concerning the financial planning process and related fields.
Dover advisers commit to an on-going process of self-improvement in the preparation and delivery of financial services to clients.
Dover advisers have agreed that their on-going professional education and training, including their formal training plans, provided by Dover have been assessed as relevant to their individual practices and the needs of their clients.
Dover advisers have agreed to follow the training plans provided to them by Dover without any further affirmation and have agreed that these plans are relevant to their practices and the particular financial services they provide to their clients. Dover advisers have reviewed these plans and agree that they are relevant to their practices.
Dover advisers affirm that they have read and understood the Dover Compliance Manual and Adviser Handbook and have agreed to observe and be bound by all processes and procedures contained in it. This includes client complaint procedures and breach reporting procedures. Dover advisers agree that it is a condition of their contract with Dover and their contract with their clients to observe all the requirements set out in the Dover Compliance Manual and Adviser Handbook.
Dover advisers affirm that they research all recommended financial products and comply with the Dover Guide to Effective Statements of Advice, ASIC Regulatory Guideline 175, other ASIC guidelines and the Corporations Act when preparing statements of advice and similar client advice communications.
Dover advisers affirm that they have read and understood all written communications provided to them by Dover and will comply with Dover’s requirements regarding professional standards and the conduct of their practices.
The Corporations Act in effect says you should be able to understand the concepts, words, phrases and sentences used in your SOA.
You should read and understand the attached materials from ASIC on understanding financial planning advice: IR 04-61 ASIC provides guidance on Statement of Advice and RG 90 Example Statement of Advice: Scaled advice for a new client
If your SOA is not able to be understood you may be able to claim compensation through the Credit and Investments Ombudsman (“CIO”) for any loss suffered as a consequence.
If you do not understand a concept, word, phrase or sentence used in this SOA you should ask your adviser for a further explanation so you do understand it.
You should not act on any advice in this SOA unless you understand every word, phrase or sentence used in it, as well as its general intent and import.
The Australian Securities and Investment Commission (ASIC) publishes guidelines setting out certain matters that must be included in your SOA.
Referral arrangements and fees
We do not have any referral arrangements which could influence this statement of advice and we have not paid any person for referring you to us other than as disclosed elsewhere in this SOA.
Conflicts of interest
We do not have any relationships that may create a conflict of interest that would influence our advice to you, other than as disclosed elsewhere in this SOA.
Salaries to staff and other services to you
The payment of staff salaries does not influence our advice in any way. The provision of accounting services and other business services to you for a fee does not influence our advice in any way.
Incomplete or inaccurate advice
Our advice is only as good as the information you provide to us. We are required to warn you that the advice may be based on incomplete or inaccurate information relating to your relevant personal circumstances. Hence, before acting on the advice, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.
You should not rely on our advice and you should contact us immediately to provide complete and accurate advice if the information you have provided to us is incomplete or inaccurate. We will then prepare a further statement of advice for you.
Research of financial products
We have researched any financial products recommended in this SOA and believe they are appropriate to your personal circumstances and in your best interests under the Corporations Act.
Approved product list (APL)
The recommended financial products are limited to those on our APL and do not include all available financial products. A copy of the APL can be provided to you upon request.
Risk disclosure and no guarantee of performance
Investments that are not financial products, such as businesses and properties, also contain risk.
“Risk” means there is a possibility that you will lose capital value and/or the income from the financial product or other investment will be less than expected, or performance will otherwise fall below expectations, on an after-tax basis. This risk derives from the general economic and environment as well as the specific circumstances of the product provider.
Dover does not guarantee the performance of any investment in any way and is not responsible if you lose capital value or if the income from an investment is less than expected.
Financial service guide (“FSG”)
You have received a copy of our FSG and you may request a further copy of our FSG at any time.
Our FSG sets out certain information required under the Corporations Act and your responsibilities as a client and the provisions of the FSG are terms and conditions of our contract.
Our FSG may change from time to time and where it does the provisions of the new FSG are automatically included as terms and conditions of our contract.
Cooling off period
There may be a cooling off period of 14 days on any financial products including insurance products we may recommend and you may change your mind without penalty during this period if you acquire such a product.
Protection of personal information
Your personal information is protected by the privacy laws. This information will not be provided to anyone or used for any other purpose unless this is necessary to comply with the law.
The law requires your personal information to be retained by Dover for seven years.
Scope of advice
Your SOA only relates to the specific matters contained in it and does not aim to cover all aspects of your financial profile. We are not responsible for any matter not covered by this statement of advice or any other matter potentially impacting your financial profile.
Time limits and responsibility for implementing our advice
You should not act on any recommendation after thirty days of the date of the statement of advice without our written confirmation that our recommendations are still suited to you.
Your goals and objectives
Your SOA will help you achieve your goals and objectives, however, we do not guarantee your goals and objectives will be met. This will depend on the general economy, the regulatory environment, numerous decisions you make, and the performance of the financial products.
These matters are not within our control and therefore no promise is made regarding whether our recommendations will help you meet your goals and objectives.
Our promises to you as your adviser
We will ensure our advice is in your best interests and appropriate to you, and prioritizes your interest over all others.
We will notify you of any significant change in the law or investment world which may affect our advice to you provided you have a statement of advice from us that is not more than six months old and are an active client who is engaging with us on an on-going basis.
Ours statements of advice and other services will be provided to you in accordance with the Corporations Act and the various regulatory guidelines and similar publications issued by the Australian Securities and Investment Commission.
We will observe all directions and instructions from Dover Financial Advisers Pty Ltd and adhere to its standards regarding the formulation and presentation of advices.
We will ensure you receive exemplary service and the highest quality advice at all times in accordance with the Policy and Dover Ethics.
We agree that we are responsible to you for any losses caused by any breach by us of the Policy.
Your promises to us as our client
You promise to take an active interest in the preparation and implementation of our advice and to ensure it remains appropriate to you and an effective strategy for improving your financial profile.
You are responsible for ensuring your bank account and investment account details including account numbers, passwords, PINs and similar information are kept confidential and that passwords and PINs are changed at least once a month.
You agree that Dover is not responsible for any losses incurred by you for any reason connected to the misuse of your bank account and investment account details by any person and any failure by any person to keep your account details, passwords, PINs and similar information confidential or any other cyber-security issues including the hacking of your computer records.
Protection of personal information
Your personal information is protected by the privacy laws. Your personal information will not be provided to anyone or used for any other purpose unless this is necessary to comply with the law. The Corporations Law requires your personal information to be retained by Dover Financial Advisers Pty Ltd for seven years.
We confirm we have met the requirements of the Australian anti-money laundering laws and anti-terrorism laws and have retained proof of your identity on our files.
Non-monetary matters impacting our advice to you
The best insurances are rarely the cheapest insurances.
We have considered matters other than just premiums when selecting the insurer whose products are in your best interests and most appropriate to you.
These non-monetary matters include the scope of the insurance cover and the insurer’s:
- policy definitions for critical insured events (eg its definition of a heart attack)
- reputation and corporate culture
- philosophy on claims management and
- general dealing with clients and their bereaved families.
We want to be as confident as possible that your claims will be paid in full and on time.
Your duty of utmost good faith
You acknowledge that any risk insurance contracts are contracts of utmost good faith and this requires you to disclose to the insurer all information that may be relevant to a decision to accept your insurance application including your medical history. You undertake to disclose in writing to the insurer all such information. You indemnify and release each of the adviser and Dover from any responsibility for any loss caused to you or any related person as a result of any failure to disclose this information to an insurer.
New risk insurance contracts
Sub-section 29(3) of the Insurance Contracts Act 1984 allows a claim to be denied by the insurer within three years of any new insurance policy being set up if the insured (ie you) failed to disclose all relevant facts. The three-year period starts afresh once a new insurance policy starts.
You should not cancel any old insurance contracts until the new insurance contracts are in place, otherwise you may not have a continuity of cover and may be uninsured.
The underinsurance problem
Most Australians are under-insured. This is due to a number of issues including affordability and the need to compromise due to competing claims on the household budget.
The under-insurance problem will be discussed with you by your adviser.
The recommended sums insured are sensible compromises and, in summary, we believe they are appropriate to you having regard to your overall financial profile.
Let your adviser know if you are concerned that you are under-insured and wish to increase the sums insured.
Indemnity and release regarding insured event occurring during the application period
You indemnify and release the adviser against any responsibility for any losses suffered by you as a consequence of the insured event occurring from the time the application is lodged with an insurer until the time it is accepted by the insurer, or is not accepted by the insurer, and you accept that you may not have any insurance cover during the application period.
Your obligation to cancel any old insurance policy and not pay premiums on any old policy
If we recommend you replace an old insurance policy with a new insurance policy it is your responsibility to cancel the old insurance policy once the new insurance policy is in place. This is so notwithstanding any other statement in this statement of advice.
Further, you should not pay any premiums on any old insurance policy and we are not required to compensate you if for any reason you do pay a premium on the old policy once the new policy is in force.
Minimum balances and other conditions on old super funds for the retention of insurance benefits
If we recommend you retain a minimal balance in your old super fund to retain insurance benefits you must make sure you continue to comply with any of your old super fund’s rules for the payment of insurance including time limits, minimum balances and minimum contributions.
It is your obligation to monitor the old super fund’s rules to ensure the insurances remain in place.
We are not required to monitor the old super fund’s rules to ensure the insurances remain in place and are not liable if for any reason you are not able to claim a benefit under the old super fund’s insurance arrangements.
ASIC has published two information sheets dealing with disclosure of information to clients about SMSFs. These are information sheet INFO 205 “Advice on self-managed superannuation funds: disclosure of risks”and information sheet INFO 206 “Advice on self-managed superannuation funds: disclosure of costs”.
If you are setting up or retaining a SMSF we ask you to read each information sheet and afterwards refer to them as needed to remain aware of the risks and costs connected to running a SMSF.
You understand that the costs of running a SMSF increase if there are more transactions or if you do not keep complete and accurate records.
If you set up or retain a SMSF you are deemed to have read these information sheets and understood and agreed to the risks connected to SMSFs identified by ASIC in these information sheets and you understand the duties and responsibilities of a trustee of a SMSF.
Your adviser may provide income tax advice including advice regarding the income tax implications of selling investments (tax advice).
If your adviser does not provide tax advice your adviser may warn you to obtain tax advice from a registered tax agent or a solicitor before accepting any financial planning advice.
If this is the case you should get separate written advice from a registered tax agent or a solicitor regarding the income tax implications of any proposed transaction before implementing your SOA.
The Corporations Act and the Australian Investments and Securities Commission (ASIC) requires us to provide you with general information about the class of financial products we recommend to you.
We satisfy this requirement by referring to relevant materials provided by ASIC and incorporating these materials into our advice to you, so that you can better understand our advice before you decide whether to accept it.
Incorporating the ASIC materials into our advice to you helps you understand our advice, how our advice is appropriate to you and in your best interest and our financial planning process generally and builds a better long-term client-adviser relationship.
You should read the following materials, including the linked materials, because they form an important part of our advice to you.
ASIC’s Money Smart website
The best source of information about financial products is ASIC’s Money Smart website. You can access this website here: www.moneysmart.gov.au.
The following table directs you to the particular information on the Money Smart website relevant to each of the financial products we recommend you consider as part of this statement of advice.
This information forms part of our statement of advice to you.
Financial Product Additional materials forming part of this statement of advice Risk insurances generally Additional information on risk insurances generally Life insurance Additional information on life insurance Total and permanent disability
Additional information on TPD insurance Trauma insurance Additional information on trauma insurance Income protection/continuance insurance Additional information on income protection insurance Superannuation and retirement Additional information on superannuation and retirement Self managed super funds Additional information on self-managed superannuation funds Risk insurances inside super Additional information on risk insurances in super funds Managed funds Additional information on managed funds Shares Additional information investing in shares Property Additional information on investing in property International investments Additional information on international investments
The following information is not required under the law but we believe it is good practice to provide it to you and that doing so enhances our long-term adviser-client relationship.
ASIC’s Financial Advice and You
ASIC has published a booklet called “Financial Advice and You” to help you identify when you need to get financial advice and how to get the most out of your relationship with me as your financial planner. You can access this booklet here: ASIC’s booklet “Financial advice and you”.
Other information provided by ASIC relevant to this advice
ASIC’s Money Smart website provides excellent information on how to get the most out of our client-adviser relationship. This includes:
- Identifying your financial advice needs. Work out whether you need financial advice.
- Types of financial advice. The type of advice you need depends on your life stage, the amount of money you have to invest and the complexity of your affairs. Find out about your options.
- Choosing a financial adviser. How to choose the right adviser.
- Financial advisers register. Find out where a financial adviser has worked and what products they can advise on.
- Financial advice costs. Learn about the cost of advice and understand what you’re paying for.
- Meeting with a financial adviser. Make the most of our meetings
- What to look for in financial advice. Learn about the things you should consider before you act on my recommendations.
- Working with a financial adviser. How to make the most of ongoing advice and what to do if you want to end our relationship.
- Problems with a financial adviser. What to do when things go wrong.
Risk insurance premiums can be paid out of your super fund or out of your non-super resources. Paying premiums out of your super fund has the advantage of making your premiums more affordable and not reducing the cash available for day-to-day living. This increases your long term retirement prospects provided the saving is applied appropriately.
But paying premiums out of your super fund has the disadvantage of reducing your super benefits on retirement by an amount equal to the premiums, plus lost earnings, compounded over time.
If we recommend you pay risk insurance premiums out of super this should be reviewed at least every three years. This is to make sure you are comfortable with the on-going tradeoff between immediate affordability and your long-term retirement plans, and to ensure the advice continues to be in your best interests and appropriate to you.
It is your responsibility to complete this review.
We recommend you do not pay risk insurance premiums out of super for more than three years unless you are paying extra contributions to ensure your long-term retirement plans are achievable.
ASIC provides additional information on the advantages and disadvantages of paying risk insurance premiums out of super funds and you can read this information here: ASIC information on paying insurance premiums through superannuation.
We ask that you read this ASIC information before you accept any advice to pay a risk insurance premium through super.
Risk insurance premiums have risen significantly in recent years. This has created an affordability issue for many clients.
We are mindful of affordability issues, and ask that you contact us immediately if you have any concerns about affordability. You should not accept our advice on risk insurances policies unless you are sure you can afford the premium over the life of the policy.
Paying an insurance premium has an opportunity cost, being whatever else you would do with the monies used to pay the insurance premium.
We consider affordability when preparing our advice. This involves potential trade-offs between the scope of insurance cover and the cost of the cover.
Common examples of these potential trade-offs are tabulated here:
Recommended strategy Advantage Disadvantage Stepped premiums over level premiums Lower premiums in the short term Higher premiums over the expected life of the policy. Indemnity value rather than agreed value Lower premiums You may not be paid the full sum insured on the insured event occurring. Payment of your claim is more likely to be disputed by the insurer. 90 day waiting period Lower premiums Lower cover. More particularly no benefit payments between days 31 and 90 after insured event occurs Lower sum insured Lower premiums Lower benefits paid if the insured event occurs: you are under-insured