A MDA (managed discretionary account) Service is a facility for making a financial investment that has the following key features:
Rather than being part of a large pool of money and/or investments, your portfolio is owned by you and managed for you according to the Investment Program included in your MDA Contract. You are always the direct legal and beneficial owner of the investments which are registered in your name.
In order to access this service, you agree to give to the MDA Provider (Stockspot) authority to make investments on your behalf according to an agreed Investment Program. In developing the Investment Program Stockspot will apply our principles of diversification and risk management to meet your investment needs.
With a MDA Service, you will be the legal and beneficial owner of the portfolio and have the ability to see the exact composition and value of your portfolio at any time (via our secure online service).
In order to provide you with our MDA Services you will need to enter into an MDA Contract. The MDA Contract includes an Investment Program which will also be included in the Statement of Advice that is prepared in accordance with the requirements in Division 3 of Part 7.7 of the Corporations Act.
The Statement of Advice and Investment Program includes the following information:
Once the MDA Contract is in place, Stockspot can act on your behalf to implement and manage your Investment Program without requiring ongoing authorisation from you each time a change is made. Funds contributed to your MDA will be invested in accordance with the Investment Program included in your Statement of Advice and MDA Contract. Stockspot will act within the agreed terms of this MDA Contract and the Investment Program at all times unless otherwise agreed with you as recorded in a new Statement of Advice or Record of Advice (as applicable).
You can terminate the MDA Contract at any time by sending an email from your registered email to enquiries@stockspot.com.au. The process can take up to a week and there are no exit fees.
To open an MDA a minimum investment of $2,000 AUD is required. The initial investment should be deposited into the Client Cash Account for which we will provide details at the time you open your account.
For portfolios under $10,000, Stockspot will phase-in the investments gradually in order to effectively manage risk versus return for smaller portfolios. During the phase in period, the portfolios are well diversified with exposure to growth and defensive investments.
We recommend that you aim to build your portfolio to $10,000 as soon as possible (ideally within 12 months) to ensure that you enjoy the full benefits of diversification.
Under the MDA, you will hold legal title to your portfolio assets and authorise Stockspot as the MDA Provider to make investment decisions based on an investment strategy. In addition to the above Stockspot will be your Investment Adviser, i.e. responsible for issuing the Statement of Advice (which includes details of the Investment Program) to you and assessing whether the MDA is appropriate for you taking into consideration your relevant personal circumstances.
As the MDA Provider, Stockspot has discretion over selecting service providers to the MDA including the Cash Account providers, Third-Party Service Providers and the provider of Reporting and Audit Services. Stockspot also supervises compliance of the MDA Service.
The Third Party Service Provider is responsible for providing Execution and Clearing services to you and holding your funds. The Third-Party Service Provider will be acting under their own AFS Licence when providing these services to you. There are no additional fees or charges applicable to Third-Party Service Providers within this MDA service. Please refer to the Third-Party Service Providers Service Agreement including FSG and Terms and Conditions for more information about fees and charges applicable outside of this MDA.
The Cash Account provider is responsible for providing a cash account for you. The Cash Account is used to fund your investment purchases and credit dividends, interest and the proceeds from investment sales. Your Cash Account is also used to pay fees.
The Cash Account provider will be acting under their own AFS Licence when providing these services to you. There are no additional fees or charges applicable to the Cash Account provider within this MDA service. Please refer to the Cash Account provider's FSG for more information about fees and charges applicable outside of this MDA Contract.
The Portfolio Reporting service provider is responsible for providing portfolio reporting services to you. These services are accessed via www.stockspot.com.au. There are no additional fees or charges applicable to the portfolio reporting services within this MDA.
As the MDA Provider, Stockspot has authority over how each Model Portfolio will be operated. These discretions are limited to:
Each Stockspot Model Portfolio has a target asset allocation. Since investments grow at different rates, your actual investment allocation will drift from your target allocation over time.
When this happens, Stockspot will rebalance your portfolio so that your investments are aligned with the target asset allocation identified in your Investment Program. Rebalancing is assessed on an individual client level as the timing of your initial investment influences your ongoing asset mix. We also periodically review the Stockspot Model Portfolio weightings and the constituent ETFs based on our ETF investment criteria.
There are a number of benefits associated with investing through this MDA Service.
Access to professional investment management: You gain access to professional investment management expertise through a range of Stockspot Model Portfolios.
Retaining ownership: Under this MDA Service you retain legal ownership of the investments in your account. The investments that form part of the Model Portfolios you invest in are held by you. This means that you legally own those investments and you retain the right to all income and capital gains relating to those investments.
A more tax efficient structure: Because you retain legal ownership of the investments, management of your tax position can be more efficient compared to other forms of investments such as traditional managed funds or unit trusts.
Your tax management may be more efficient because:
We recommend you speak to a tax professional to understand any potential tax implications.
It is important to understand that, even with a sensible diversified investment strategy and appropriate time horizon, investing always involves some risk.
The financial performance of the Stockspot Model Portfolios may be influenced by a variety of general domestic and international economic factors and business conditions, which are outside the control of Stockspot. These include (but are not limited to) changes in the inflation rate, commodities prices, exchange rates, interest rates, government fiscal, monetary and regulatory policy, natural disasters, health pandemics and acts of terrorism
Stockspot 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, your Stockspot Model Portfolio may not perform as anticipated, which could result in losses. Please carefully read the risks summarised in the MDA Contract, the PDS documents for each ETF, and the Terms and Conditions issued by the Third-Party Service Provider and Cash Account provider.
No guarantee can be given in respect of the future earnings of the MDA Service or the capital appreciation of your investments within the MDA. The price of investments that Stockspot has purchased on behalf of you can fall as well as rise over time. There are risks associated with the underlying investments within the MDA, which are outlined in the relevant PDS for each ETF. You should carefully consider the risks of each ETF before deciding to invest in this MDA.
The operating performance of the MDA Service may also be impacted by industry risk factors. These factors are outside the control of Stockspot. Such factors include (but are not limited to) increased compliance costs and variations in legislation and government policies.
To counter the potential impacts of industry risk, all Stockspot Model Portfolios are constructed on a direct ownership basis. This means that you, as the investor, do not have counterparty risk. Regardless of the status of Stockspot or its suppliers, you, as the full legal and beneficial owner of your investments, separately hold your investments under your own unique Holder Identification Number (HIN). You can use your HIN to check your holdings at the share registries.
An MDA may not be suitable for you if you have provided limited or inaccurate information relating to your relevant personal circumstances and it may cease to be suitable if your relevant personal circumstances change. It is therefore important that you notify us of any changes so our advice is always accurate. You can notify us of any change in your personal situation, risk profile or circumstances by updating your profile on our website.
Did you know? Small differences in 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 are appropriate for you.
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 account, from the returns on your investment or from the funds and assets held in your MDA.
Stockspot 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 as it is important to understand their impact on your investment.
The arrangement between Stockspot and you is governed by the terms and conditions of the MDA Contract. The following tables set out the fees and costs for this MDA.
| Type of fee or cost | Amount | How and when paid |
|---|---|---|
| Fees when your money moves in or out of the managed investment product | ||
|
Establishment fee The fee to open your investment |
Nil | N/A |
|
Contribution fee The fee on each amount contributed to your investment |
Nil | N/A |
|
Withdrawal fee The fee on each amount you take out of your investment |
Nil | N/A |
|
Exit fee The fee to close your investment* |
Nil | N/A |
| Management costs | ||
|
MDA Service Fee¹ The fees and costs for managing your investment |
Bronze: $5.50 per month All other memberships: up to 0.055% per month of your investment balance, excluding money invested in Stockspot Savings (fees quoted inc. GST – further details provided in table below) |
Calculated based on the average of your starting and ending account balance at the 15th of each month, and debited before the end of each month |
| Service fees | ||
|
Switching fee The fee for changing investment options |
Nil | N/A |
|
Performance Fee¹ The fee on new net profit within a month |
Nil | N/A |
|
Transaction Fees¹ The fees charged by the Third-Party Service Provider for the provision of dealing services |
Nil | N/A |
*Refer to administration fees (below) for more information on broker-to-broker transfers
Not less than 30 days notice will be given by Stockspot to you of changes to the terms and conditions of the fees and charges set out under MDA Fees.
The MDA Service Fee is charged on a tiered basis determined by your investment balance. No fee is charged on money invested into Stockspot Savings.
The following table outlines the tiered structure:
| MDA Service Fee - Tiered Fee Structure | |
|---|---|
| An all inclusive fee based on your average account balance each month. | |
| Bronze |
0% for the first 6 months, then $5.50 per month (Incl. GST) New clients investing $10,000 or less |
| Silver |
0.055% per month or 0.66% p.a (Incl. GST) For account balances between $10,001 - $49,999 Automated rebalancing and dividend reinvestment |
| Gold |
0.055% per month or 0.66% p.a. (Incl. GST) For account balances between $50,000 - $199,999 Access to Stockspot Themes for portfolio customisation Automated rebalancing and dividend reinvestment |
| Platinum |
0.044% per month or 0.528% p.a. (Incl GST) For account balances between $200,000 - $1,999,999 Access to Stockspot Themes (for portfolio customisation) Automated rebalancing and dividend reinvestment |
| Diamond |
0.033% per month or 0.396% p.a. (Incl GST) For account balances of $2M+ Automated rebalancing and dividend reinvestment Access to Stockspot Themes (for portfolio customisation) Dedicated Investment Adviser |
This fee is paid to Stockspot and automatically deducted from your Client Cash Account each month
The following table provides an example of how the fees and costs within the Stockspot MDA can affect your investment over a one year period.
| EXAMPLE | BALANCE OF $20,000 WITH NO CONTRIBUTIONS DURING THE YEAR | |
|---|---|---|
| MDA Service Fee |
0.055% (incl GST) per month Annualised rate is 0.66% p.a. (incl. GST) |
Total fees payable to Stockspot on a $20,000 portfolio would be $11 per month (incl GST) (approximately $132 p.a.)
|
The following table provides an example of how the fees and costs within the Stockspot MDA can affect your investment over a one year period. The example assumes a balance of $20,000 at the beginning of the year with a contribution of $10,000 during the year.
| EXAMPLE | BALANCE OF $20,000 AND $10,000 CONTRIBUTION DURING THE YEAR | |
|---|---|---|
| MDA Service Fee |
0.055% (incl GST) per month Annualised rate is 0.66% p.a. (incl. GST) |
If you had an investment of $20,000 at the beginning of the year and you put in an additional $10,000 in 6 months, you would be charged a fee of $11 per month (for the first 6 months) and $16.50 per month thereafter (based on your account balance). This equates to 0.66% of your portfolio balance per year (incl GST) and includes:
|
MDA Service Fee
The MDA Service Fee is calculated based on the average of your starting and ending account balance at the 15th of each month, and debited before the end of each month from your Stockspot Client Cash Account. Fees are automatically debited from the cash balance in your account.
When you lodge a full withdrawal request, the Management Fee will be calculated on the average balance in your account for the month on a pro-rata basis and deducted from the account prior to the account closure being processed and finalised.
The Management Fee is quoted inclusive of GST.
Fees on multiple accounts
If you have multiple accounts as the primary account holder, your fee tier is determined by your combined investment balance across all accounts, including any non-fee paying accounts. This helps many Stockspot clients enjoy lower fees based on their total investment balance across all of their accounts.
Only your first account is eligible for the 'first 6 months free' offer.
All eligible kids’ accounts continue to be fee-free until the portfolio balance reaches $10,000 or the child turns 18.
Transaction fees
There are no transaction fees applicable to this MDA Service. Brokerage costs are included in the MDA Service Fee.
ETF management fee
ETF management fees are charged by each fund issuer and included in the traded unit price. On a portfolio-weighted basis, the ETF management fees are typically 0.27% to 0.30% per year for Stockspot Model Portfolios. ETF management fees for the Stockspot Sustainable portfolios range from 0.34% to 0.47% per year. ETF management fees for the Stockspot Topaz Income and Stockspot Topaz Inflation Portfolios range from 0.35% to 0.44% per year. ETF management fees for the Stockspot Themes range from 0.04% to 0.74% per year.
Administration fees
There is an administration fee of $30 per holding for Off-Market Transfers and HIN transfers out of Stockspot. There is no cost for selling your investments directly via the Stockspot dashboard.
Remuneration or other benefits received by Stockspot’s Representatives
Directors, Employees and Representatives of Stockspot receive salaries, bonuses and other benefits from Stockspot.
External service providers to this MDA Service including Execution, Cash Management, Reporting, Audit and Compliance Services are paid from the fees collected by Stockspot.
Staff remuneration and benefits
Stockspot staff are remunerated based on salary (including bonuses) and may be shareholders of Stockspot so participate in profits earned in relation to the Stockspot business.