Primary Disclosure Statement

Secondary Disclosure Statement
(Authorised Financial Adviser)
Name and registration number of
Authorised Financial Adviser:
Benjamin Mark Jones: FSP106126
Physical address:
63 Bourke Street, Palmerston North
Postal address:
PO Box 537, Palmerston North 4440
Trading name:
Pivotal Advisory Limited T/A Pivotal Advisory
Telephone number:
06 353 8655
Email address:
[email protected]
This disclosure statement was prepared on:
1 February 2013
Details of the firm
I founded Pivotal Advisory Limited in 2012, and this new company purchased Leemar Financial
Services Limited; a company I had founded in 2001.
In 2011, I registered as a Financial Service Provider (FSP number 106126). I am the Managing
Director of Pivotal Advisory Limited and act as an employee of the company. The shareholders are
Ben Jones, Dannielle Jones, and the trustees of the BM & DL Jones Family Trust. The company is
registered as a private company on the Wellington register of the New Zealand Companies Office.
My experience and qualifications
I have been providing investment advice since July 1999 after qualifying as an adviser with Royal &
SunAlliance. I have the following relevant qualifications:
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Bachelor of Science (First Class Hons.), 1997
Life Insurance Sales Preliminary Certificate, 1999
Diploma in Business Studies Endorsed Personal Financial Planning, 2005.
I also earned Certified Financial Planner status in 2010 and I have kept my financial adviser services
up to date by:
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Meeting the mandatory number of continuing professional development hours as per the
guidelines issued by the Institute of Financial Advisers (IFA)
Attending annual industry conferences
Attending various courses, workshops and webinars organised by accredited training
organisations
Regularly travelling overseas and attending other financial planning conferences, forums etc
Reading current literature
Purchasing comprehensive investment and risk research from a number of sources.
In addition, as an Authorised Financial Adviser (AFA), I am required to undertake the mandatory
number of continuing professional development hours required by the Code of Professional Conduct
for Authorised Financial Advisers.
How I operate
When I provide financial adviser services, I follow the internationally recognised six-step process as
follows:
1. Establishing the client-adviser relationship
2. Gathering client information and determining the client’s goals and objectives
3. Analysing and evaluating the client’s financial status, which may include financial situation,
financial needs, financial goals and tolerance for risk
4. Developing and presenting recommendations and/or alternatives in writing
5. Overseeing the implementation of the financial adviser services recommendations
6. Monitoring and reviewing the financial adviser services.
Disclosure Statement version 1303S dated 11 March 2013
Page 1
This can require a series of meetings with a prospective client before our advice is finalised. It also
means I maintain a close ongoing relationship with clients, regularly reviewing progress and working
with them over time to ensure their goals can be met.
The services I provide will depend on the client’s needs. They may include any or all of those
detailed in this disclosure statement.
My advice will take account of the client’s personal objectives, financial situation and needs. It will
be clear and concise, with enough detail for the client to make an informed decision about whether
to act on it.
Services and products I provide
I provide the following types of financial adviser services:
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Financial advice
Investment planning services
Discretionary investment management services.
I provide financial adviser services on the following subject matters:
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Cash management (including budgets and banking structures)
Mortgage advice and/or broking
Retirement planning
Investment planning and/or management
Risk management (including insurance planning and review)
General advice on fire and general Insurance
General advice on asset protection and estate planning
General advice on taxation relating to investments and insurance
General business advice.
I provide financial adviser services in relation to the following types of financial products:
Risk products
Savings and investment products
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Life cover
Accidental death cover
Disability income protection
Trauma/living insurance
Business overheads cover
Mortgage protection insurance
Key person protection insurance
Medical insurance
Property investments
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Direct shares, direct bonds (listed and
unlisted)
Managed funds including unit trusts,
KiwiSaver and superannuation schemes
Combined risk and savings
Tax paid investment bonds
Private equity and venture capital
investments
Bank deposits and bonus bonds
Government stock
Property purchasing
Syndicated property
Mortgages
Product providers used:
I have no restrictions in placing investments with any product provider. Details of investment
products in respect of which I have a normal supplier relationship are provided under the
Remuneration section (on page 5). When it comes to risk management products, KiwiSaver and
insurance bonds, I and/or Pivotal Advisory Limited have a contractual agreement with the product
provider in order to place business with that provider. I and/or Pivotal Advisory Limited have
contractual agreements for the sale of these products with the following suppliers:
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Asteron Life Limited
AXA New Zealand
OnePath Life (NZ) Limited and OnePath (NZ) Limited
Sovereign Assurance Limited
Tower Health & Life Limited.
Disclosure Statement version 1303S dated 11 March 2013
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Fees payable by the client
I provide the initial consultation free of charge, but specific fees charged beyond that initial
consultation will vary according to the nature of the services provided, as outlined below. In general
terms, fees can be broken down into three areas; getting advice, implementation costs, and ongoing
reporting and advice fees. Relevant fees are based on an hourly rate of $200 plus GST.
Plan fee
We have a plan preparation fee. This plan fee covers the preparation, research and creation of the
plan and is payable to Pivotal Advisory Limited upon receipt of invoice. The plan structure is as
follows:
KiwiSaver recommendations
Cash management report
Insurance report
Business insurance report
Investment report
Full financial plan
$ 50 plus GST
$250 plus GST
$250 plus GST *
Up to $1,000 plus GST
Up to $1,000 plus GST
Up to $1,500 plus GST
* Our current business practice is to rebate this fee upon implementation of our recommendations
should we receive a commission payment.
Implementation costs
Pivotal Advisory Limited is eligible to receive commission, bonuses and non-monetary payments
from product providers in relation to the sale of products. Details of these payments are provided in
the Remuneration section (on page 5) of this disclosure statement. Please note that entry fees for
managed funds and direct investments will be discounted to a maximum of 1%, or that we may
agree to provide implementation services on a fee-only basis using our hourly rate of $200 plus
GST. In such cases, fees are payable to Pivotal Advisory Limited upon receipt of invoice.
Ongoing fees
Pivotal Advisory Limited is a fee-based financial planning firm. We charge consultancy and ongoing
service and advice fees based on our hourly rate of $200 plus GST, at a level dependent on the type
of service a specific client may require. Because of the unique nature of service requirements from
client to client, agreement of the exact fee applicable will be determined after discussion with each
client, and clearly documented in the Statement of Advice. Some general examples are given below.
1. Ongoing fees for wrap service (OneAnswer) clients
Adviser monitoring fees are based on the client’s funds under management, with a tiered structure
of all assets under $500,000 charged at 1.00% p.a., assets of $500,000 - $1,000,000 at 0.80%
p.a., and assets above $1,000,000 at 0.75% p.a. These fees cover ongoing monitoring and advice,
regular reviews (as per the table for non-wrap service clients), and tax reporting for the wrap
service investments. They are deducted from the client’s cash transaction account on a monthly
basis.
All commission paid by the product provider, for the funds invested by the client, will be credited to
the client’s cash transaction account. The timing of these payments will vary, depending on the
product provider selected.
In addition to the fees above, the wrap managers have additional fees charged directly to the client.
These are not payable to Pivotal Advisory Limited and for further information please refer to the
appropriate investment statement.
Disclosure Statement version 1303S dated 11 March 2013
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2. Ongoing fees for non-wrap service clients
Amount invested (in NZD)
0 – $50,000
+$51,000 – $250,000
+$251,000 – $600,000
+$601,000 - $1,000,000
+$1,001,000 and above
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Fees applicable
(plus GST)
$600 per annum
0.90% per annum
0.90% per annum
0.80% per annum
0.75% per annum
Number of free
reviews included
1
1
2
4
4
Additional reviews are available for $500 plus GST per review.
Investment tax reports are available for $250 plus GST per investment entity.
These fees are based on the client’s funds under management, modified for specific client service
requests as applicable. A set monthly fee (agreed upon for the following 12 months) suits most
clients from a budgeting perspective, as well as for creating certainty upfront. However, if a client
prefers, we can also simply work on an hourly basis of $200 plus GST as required.
Other interests and relationships
There is no contractual requirement, quota or agreement in place, for either Pivotal Advisory Limited
or me, to recommend certain supplier products or services.
I and/or Pivotal Advisory Limited have a variety of relationships (as detailed below). However none
of these commercial relationships present any particular conflict of interest to consumers which
would be reasonably likely to materially influence me in providing relevant financial adviser services.
Relationship with Broker Web Risk Services
Pivotal Advisory Limited has an agreement with Broker Web Risk Services to provide general
insurance services. For any general insurance arranged through Broker Web Risk Services, Pivotal
Advisory Limited receives 25% of the commission paid by the underwriting insurance company, for
clients introduced to Broker Web Risk Services by me.
Relationship with Asteron Life
Pivotal Advisory Limited is part of the ONE Financial Adviser network supported by Asteron Life. This
is a voluntary group of Asteron Life user adviser groups that meet regularly to share ideas,
undertake training and provide feedback on Asteron Life’s products and services. Asteron Life, at
their discretion, may provide support for training and development grants, marketing grants and
any travel and accommodation expenses relating to participation in this programme. There is an
expectation that 85% of applicable new risk insurance business is placed with Asteron Life, although
there is no compulsion to place any specific client business with that provider. I still have the
freedom and flexibility to recommend the insurance provider that is in the clients’ best interest.
Relationships with First NZ Capital Securities and Forsyth Barr
Pivotal Advisory Limited has agreements with First NZ Capital Securities and Forsyth Barr to provide
share broking services. For any transaction arranged through First NZ Capital Securities, Pivotal
Advisory Limited receives 50% of the commission received by First NZ Capital Securities. For any
transaction arranged through Forsyth Barr, Pivotal Advisory Limited receives 30% of the commission
received by Forsyth Barr. Details of the portions received by Pivotal Advisory Ltd are provided in the
Remuneration section (on page 5 under investment products) of this disclosure statement.
Relationship with Allied Kiwi
Pivotal Advisory Limited has an agreement with Allied Kiwi to provide mortgage broking services. For
any mortgages arranged through Allied Kiwi, Pivotal Advisory Limited receives 97.5% of the
commission paid by the lender. Details of brokerage received by Allied Kiwi are provided in the
Remuneration section (on page 6 under mortgage products) of this disclosure statement.
Disclosure Statement version 1303S dated 11 March 2013
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Relationship with Davidson Fraser
The BM & DL Jones Family Trust has a minor (10%) shareholding in the boutique Palmerston North
accounting firm Davidson Fraser.
Remuneration
I am remunerated as an employee and shareholder of Pivotal Advisory Limited, primarily by
shareholder salary. Pivotal Advisory Limited receives all commissions and client fees that are
generated by me, as the financial relationship is between the client and my company. Any
remuneration received by my company is used to pay the costs incurred in providing advice (e.g.
office, staff and marketing costs), along with my personal shareholder salary.
Types of remuneration I receive via Pivotal Advisory Limited are as follows:
Investment products
Investment product
Direct shares and bonds (First NZ Capital)
Direct shares (Forsyth Barr)
Direct bonds (Forsyth Barr)
Managed funds
KiwiSaver
Max. initial
commission as
a % of each
investment made
0.50% plus $25
0.45% (min. $30)
0.23% (min. $30)
1.00%
Nil
Max. ongoing
commission as a %
of total value of
investment
Nil
Nil
Nil
1.00
0.25
Some of the arrangements I have made to manage any conflict of interest include: using third party
research for product suitability, negating any difference in commission by ensuring a maximum of
only 1% upfront applies, rebating ongoing commission where possible, upfront disclosure of
commission, and basing our remuneration model on charging fees directly to clients.
Risk products
Product Provider
Asteron Life Limited
AXA New Zealand
OnePath (NZ) Life
Sovereign Assurance Limited
Tower Health & Life Limited
Max. initial
commission as
a % of annual
premium
200
150
230
200
170
Ongoing
commission as a
% of annual
premium
5.00
5.00
7.50
7.50
7.00
Some of the arrangements I have made to manage any conflict of interest include: using third party
research for product suitability, negotiating commission rates with providers so they are all
comparable, and upfront disclosure of commission.
Please note the following:
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Maximum initial commission amounts listed above include the current production bonuses paid.
All current bonuses are subject to be revised by the insurance company at any time.
There are variable options with all the companies above, such as reducing initial commission and
increasing ongoing commission.
All of the above companies offer various incentive programmes from time to time based on
production. The incentives could range from such things as petrol or grocery vouchers and ‘Fly
Buy’ type rewards, to subsidised offshore conferences. As the specific nature of any incentive
changes regularly, please contact us if you require further details of any current incentive
programme.
Disclosure Statement version 1303S dated 11 March 2013
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Mortgage products
Product Provider
ANZ Bank New Zealand Limited
ASB Bank Limited
Better Mortgage Management Pty Limited
The Co-operative Bank – personal loans
DBR Property Financiers
General Finance
Liberty Financial Limited
Resimac
Sentinel Limited
Southland Building Society Banking
Sovereign Home Loans
Westpac New Zealand Limited
Max. initial
brokerage as
a % of loan
0.70
0.60
0.65
3.00
1.00
0.65
0.70
0.60
1.50
0.60
0.45
0.70
Ongoing
Brokerage as
a % of loan
Nil
Nil
0.15
Nil
Nil
Nil
0.30
0.15
Nil
Nil
0.20
Nil
Some of the arrangements I have made to manage any conflict of interest include: using third party
research for product suitability, attempting to use a mainstream lender where possible (as all these
have comparable brokerage rates), and upfront disclosure of brokerage.
Non-monetary benefits (soft dollar disclosure)
From time to time, I may receive certain non-monetary benefits from product providers. These could
include gratuities such as: a bottle of wine at Christmas time, a free calendar, pen or book, the
occasional luncheon, drinks after a briefing session, invitations to sporting events, subsidised
professional development, discounted training courses or office supplies, etc.
Professional memberships
I am a member of the Institute of Financial Advisers (IFA) and, as a condition of my membership, I
comply with the Institute of Financial Advisers Code of Ethics and Practice Standards in all facets of
my practice.
I hold an annual certificate to practice, issued by the Institute of Financial Advisers.
Professional indemnity (PI) insurance cover
In accordance with industry standards, Pivotal Advisory Limited is covered under a professional
indemnity insurance policy. This policy includes the following covers: professional indemnity, public
liability, employer’s liability, dispute resolution liability, trustee liability and statutory liability.
This policy applies when I act in my professional capacity as an adviser providing financial adviser
services. As with all insurances, these covers have limitations and are subject to certain exclusions,
terms and conditions.
Declaration
I, Benjamin Mark Jones, declare that, to the best of my knowledge and belief, the information
contained in this disclosure statement is true and complete, and complies with the disclosure
requirements in the Financial Advisers Act 2008 and the Financial Advisers (Disclosure) Regulations
2010.
Signed:
Date:
Disclosure Statement version 1303S dated 11 March 2013
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