Nuts & Bolts: Fees & Other
It’s Refreshing – to move from clutter …to Clarity
These days the wealth management tool box is often cluttered. And full of hidden conflicts of interest.
At First Samuel we prefer to move to clarity. See more of our refreshing approach to the nuts-and-bolts of wealth management.
It’s Right - to move from concealment to …Clarity
First Samuel is strongly committed to the highest ethical standards. This is not just a statement but something that is in our DNA.
Since our founding in 1999, we have always put each client’s interests above our own. Our clients’ needs are first, last and always. In everything we do.
Unfortunately the wider wealth management world doesn’t always meet the standards that it should.
But we understand that it is your wealth. Your future. And only the highest standards will suffice.
The wealth management industry is rife with fees and costs, many of which are hidden. There are platform fees, administration fees, managed fund fees, entrance fees, exit fees, fees paid to third parties, and more.
You need clarity. First Samuel’s policy of complete transparency means there are no surprises for you.
We never pay or accept commissions, and any commissions that are unavoidably earned are passed on to you in full, every time.
And we disclose all of the fees and costs you pay. Please see Fees section below.
There is always clarity.
First Samuel has been in business since 1999. And has succeeded because of the trust that is placed in us by our clients. And we will not compromise a client’s trust in any way.
This is not just a question of fee transparency, but also of the way we conduct our business.
We advise clients when there is an administration error. And we resolve any conflicts in our clients’ favour.
We provide full transparency about all client transactions and dealings.
And we expect our clients to act ethically and respectfully toward us and our Associates in return.
First Samuel is not for everybody
And so it is useful setting out the type of client for whom we are best suited.
1. How involved do you want to be?
Our focus is on long-term wealth management, not managing day-to-day expectations about individual investments. So, if you are a hands-on investor, wanting to talk to a broker-like person daily or weekly, then we are not for you.
Our clients are delegators.
2. How patient are you?
Wealth management is a long-term business and the best opportunities sometimes take time to bear fruit. If you want instant investment gratification, then we are not for you.
Our clients are patient.
3. Size matters
The size of your investible assets matters. The service that we provide is efficient for you if the amount you invest with us is above a sensible size. Our usual minimum investment amount is $1million. For younger investors or those in superannuation accumulation phase we will consider a minimum investment amount of $500,000. Please contact us to discuss whether your circumstance and size fit.
Our clients understand investment efficiency.
4. Ethics matter
If you think you might like us to undertake an action that avoids compliance with a law or regulation, then we are not for you.
Our clients are ethical. As are we.
It’s Prudent - to move from commissions to …Clarity
Do you know how much you are really paying someone to manage your wealth? And who you are paying it too? And for what?
The wealth management world is full of commissions and conflicts, many of them hidden. Some fees are disclosed, some are hidden. Some costs are disclosed, some are hidden. There are platform fees, administration fees, managed fund fees, entrance fees, exit fees, fees to third parties, and more.
You need clarity.
First Samuel’s policy of complete transparency means there are no surprises.
We never pay or accept commissions, and any commissions that are unavoidably earned are passed on to you in full, every time.
And we disclose all of the fees and costs you pay.
There is always clarity.
With First Samuel there are only two types of fees that we charge. The only other costs are those that we have to pay to others when we manage your investments.
At First Samuel we simply seek a fair return for our expertise and the assurance our service brings. Nothing more. Nothing less.
We recognise it’s a competitive industry. And so our fees are broadly in line with other groups that provide a similar service, or which bundle together similar services.
We do not discount and we do not expropriate.
Our fees are divided into two clear areas:
- Wealth Strategy Fee – a fixed amount for our wealth strategy advice (note: this fee does not apply to Wholesale Investors or Not-for-Profits)
- Wealth Management Fee – a percentage of your investments for our expert management
Wealth Strategy Fee
Our initial meeting is cost and obligation free. It's a chance for us to better understand your needs and for you to better understand our services.
From this meeting we will agree with you what initial advice you need and what it will cost.
Our initial advice will look at your current circumstances and what you'd like to achieve, and then advise you on the best way to get there. This process takes into account the wide range of regulatory, market and investment constraints along with the right opportunities to create the best strategy for you.
The scope of this advice will vary, and will be driven by your needs. Before giving this advice, we will provide a firm price to you.
It is important to regularly monitor and update your wealth strategy so that you are taking advantage of the various strategies that might be available to you at different stages in your life or when your circumstances or regulations change.
Our wealth strategy fee is a fixed fee per annum and will depend on your needs and the complexity of your situation.
We will agree with you in advance the fee that will apply.
Wealth Management Fee
Our wealth management fee covers the individual management and administration of your investments by our experts and covers a wide range of services, including:
- Initial and ongoing portfolio design
- Buying, selling and settling of trades
- Securities research
- Weekly portfolio review and compliance check
- Tax management
- Record keeping of securities
- Capital gains tax recording
- Securities’ verification
- Daily website updates (bespoke)
- Weekly investment update (general)
- Quarterly reporting (bespoke)
- Annual reporting (bespoke)
- Independent accountant’s audit certificate (bespoke)
- Annual investment dinner
For more information on Services & Reporting please see section above.
Size of investments managed Fee GST Total First $1m of investments 1.60% 0.16% 1.76% p.a. Next $4m of investments 1.25% 0.13% 1.38% p.a. Amounts greater than $5m* 1.15% 0.12% 1.27% p.a.
*Fee negotiable for amounts over $10m
External fees and commissions
First Samuel does not take a percentage of any custody fees, brokerage fees or government charges relating to financial transactions and the safekeeping of your assets (see below).
Costs charged by others
Custody Fees - Charged by JP Morgan
These fees are charged by the Custodian and reflect the costs of a mix of services that allow for the efficient safekeeping, registration and administration of your portfolio. The use of a Custodian means we can, among other things, undertake 'bulk trades' with a stockbroker. This means we can access lower brokerage rates, more readily access share placements from which retail investors are typically excluded and act more quickly in the market, if required.
- Account keeping fee - $500 p.a. (plus GST)
- Transaction fees - From $8.50 to $35.00 per transaction (plus GST)
Brokerage - Charged by brokers
This is the fee charged by a stockbroker to execute trades on your behalf. We use a panel of 'institutional' stockbrokers, thereby having the lowest possible fee commensurate with our standards for trade execution and service.
- Generally 0.3% of the value of a trade (plus GST)
You must pay all government or other charges, levies or extraordinary costs incurred by us or others on your behalf under your MDA contract.
Working with your accountant
It Adds Up - to move from competition to …Clarity
Many investors experience competition between their wealth advisor and their accountant.
First Samuel doesn’t. We seek clarity. And co-operation.
We know that establishing a strong relationship with your accountant is going to provide you with the best long-term outcome.
We offer expertise on a range of wealth management matters outside what accountants do and, in the areas that overlap, we work with your accountant to ensure the best outcome for you.
And we recognise that some areas are clearly the domain of your accountant.
With your consent we will provide your accountant with an individual login to the First Samuel website where they can view at any time the reports on your Private Reporting Pages.
This saves time and ensures your accountant has all the necessary information at their fingertips.
At the end of the financial year we provide a complete and independently-audited package of financial and taxation reports, which means your accountant has reliable data. You save on accountants’ fees, and tax time is no longer an ordeal.
Self-managed super funds
Once you have decided to have a self-managed super fund (SMSF), you need to decide who is responsible for what. Whilst you cannot outsource your role as trustee or director of your SMSF, you can enlist the right help to ensure you meet your responsibilities.
Typically you might outsource the operation, management and administration of your SMSF to a combination of your accountant and First Samuel.
Safeguarding your assets
It’s Safe – to move from concern to …Clarity
Safeguarding your assets is crucial. It is your wealth. It is your future.
That’s why it’s important to feel confident in the structures put in place to hold and manage your investments. So that you can live well and sleep well.
First Samuel will always provide clarity.
Legal & regulatory framework
First Samuel holds an Australian Financial Services Licence (No. 225405) and is regulated in the provision of Managed Discretionary Account Services. We have appointed JP Morgan as our third party external custodian for all listed securities in client portfolios.
As a client, you enter into a contract with First Samuel, which sets out each party’s obligations and the investment parameters under which we will operate. This is called your Investment Program. The contract establishes a limited power of attorney under which First Samuel is authorised to implement the contracted services and investment program, and also acknowledges that First Samuel holds assets on trust for its clients.
How are investment assets held?
The individual registration and non-pooling of assets means that it is possible to identify and value the individual assets of any client at any time.
Registered clients and those in custody arrangements have separate accounts or registration numbers for their investments with the relevant registrar. Every client also has a separate cash account with ANZ bank. This stringent process ensures that any holdings or assets are immediately identifiable and are not ‘pooled’ with the assets of any other client.
How are transactions on clients’ accounts authorised?
The limited power of attorney in a client’s contract allows First Samuel to initiate transactions on behalf of the client necessary to implement the contract and related investment program. The First Samuel board has approved a list of authorised signatories who have the authority to instruct and approve transactions entered into for clients. All securities transactions, payments and registration instructions must be jointly approved by two authorised signatories.
What reconciliations are performed?
Daily reconciliations are performed on client cash holdings between First Samuel’s portfolio system and ANZ cash account records. Client investment reconciliations are performed weekly between First Samuel’s portfolio system and JP Morgan’s records. Any discrepancies are promptly investigated and resolved.
What about independent verification?
Your investments are independently audited each year by MSI Ragg Weir and you receive an independent audit certificate for your individual portfolio(s). First Samuel’s systems of internal control are also audited for effectiveness and accuracy. In addition, our custodians, JP Morgan, are subject to periodic audits to confirm that their internal controls are operating effectively and that their clients’ assets are correctly valued.
What type of insurance does First Samuel hold?
First Samuel holds professional indemnity insurance in the amount required by ASIC and also holds significant Fidelity (Crime) insurance cover.
Services & reporting
It’s Informative – to move from chaos to …Clarity
In the Information Age it is crucial to be properly informed. When it comes to your wealth and its management, clear and detailed information is a must. And in a fast-moving world, regular, updated information is a necessity.
First Samuel wants you to have peace of mind when it comes to your investments. So you can live well and sleep well. That’s why we provide clear, detailed and regularly updated reports for you. Because you need clarity.
First Samuel replaces the clutter of spreadsheets or of broker or fund statements with absolute clarity. From the day-to-day fluctuations of the share market to the big picture, we make sure you have all the information you need to feel secure and fully informed.
Your Private Reporting Page is your window into your investments and their performance. It's assessable at any time through our website with your own secure username and password.
Day to day
By 10am every morning, six bespoke portfolio reports are uploaded onto your Private Reporting Page. Those reports are:
- Portfolio Appraisal - What you own
- Performance - Your portfolio performance fiscal year to date
- Cash ledger - Your portfolio’s bank statement fiscal year to date
- Transactions - All of your portfolio’s transactions fiscal year to date
- Realised CGT - Capital gains tax report for your securities sold fiscal year to date
- Unrealised CGT - CGT position of every line of stock in your portfolio
On the second page of our weekly client update, Wry & Dry, we provide investment updates, including commentary on each security transaction (when completed) as well as individual company reports.
After the end of each quarter a report will be uploaded onto your Private Reporting Page. This report contains:
- Commentary - A generic commentary on the Australian equity portion of your portfolio
- Performance chart - Showing the contribution to performance fiscal-year-to-date by the 15 best performing securities and the five poorest performance securities.
- Portfolio report - Containing four bespoke reports: Portfolio Summary; Portfolio Appraisal; Performance Report and a Transaction Report
- Tax invoice
- Flash after-tax performance report for the fiscal year just ended - Early July
- Personal Investment Report on your portfolio(s) - Early August
- Accountant’s pack & tax reports - Early October
- Independent audit certificate - Early October
We understand that our relationship with you is also crucial to the support you get to pursue your wealth management goals.
Our first priority is you. And we devote considerable resources to ensure we provide you with strong and enduring support.
Private Client Adviser
We will appoint one of our specialists to manage your relationship with us. This is not about account management, but relationship depth.
If your relationship with us involves wealth strategy advice, your Private Client Adviser will be your wealth strategist.
If your relationship is investment only (i.e. you are a wholesale or not-for-profit client) your Private Client Adviser will be one of our senior Associates.
CIO Conversation Dinners
Each year we hold a series of private dinners for our clients where our Chief Investment Officer reports on investment matters and responds to detailed questions. These are for small groups of about 20 clients and are held in popular suburban restaurants.
Annual Wealth Forum
We hold an annual Wealth Forum for our clients with a presentation by a wealth expert. The experts can come from all parts of the industry. Past presenters have included Saul Eslake (economist); Peter Costello (Federal Treasurer); Li Cunxin (Mao’s Last Dancer – on China); Scott Haslem (Hong Kong economist); Alan Kohler (financial journalist); Michael Reid (art); Clint Laurent (demographer); Don Stammer (investment); Ian Harper (economist), Norman Smorgan (family wealth) and our most recent speaker, Vladimir Konovalov (on Russia’s oil & gas).
We invite our clients to an annual art event and cocktail party. Past events have included a private showing of the studio of noted artist Bruno Leti; a private showing of Melbourne’s finest antique collection; Monet’s Garden exhibition and cocktail party and Italian Masterpieces from the Prado and cocktail party.
We sponsor Eat Street, an annual food and wine fest where all of the proceeds assist a charitable cause. We pay, our clients enjoy.