1 COMMSEC ADVISER SERVICES |STATEMENT OF ADVICE …



1 COMMSEC ADVISER SERVICES |STATEMENT OF ADVICE GUIDANCE WORDING FOR COMMONWEALTH BANK CASH MANAGEMENT SERVICES (ACCELERATOR CASH ACCOUNT AND TERM DEPOSIT)COMMSEC ADVISER SERVICES | OCTOBER 2015Statement of Advice Guidance Wording for Commonwealth Bank Cash Management Services(Accelerator cash account and term deposit)IMPORTANT INFORMATIONThis guidance wording for the Commonwealth Bank Cash Management Services (Accelerator Cash Account and/or Term Deposit) is provided to you as a guide only for inclusion in a Statement of Advice (SOA). It is not a complete SOA. It does not take into account any particular individual’s objectives, financial situation or needs. It does not provide you with a complete mechanism for complying with or demonstrating compliance with relevant advice related obligations in the Corporations Act or elsewhere. It should be assessed inconsultation with your own business rules and by your compliance department to determine the appropriateness for your client base and for compliance with the Corporations Act and other legislative or regulatory requirements. This document is provided to you as a wholesale client and is for your information only. It is not to be disseminated as a work of CommSec Adviser Services.We believe that the information herein is correct and any opinions, conclusions or recommendations contained in this guidance are reasonably held or made as at the time of its compilation, but we make no warranty as to the accuracy, reliability or completeness of that information.Except to the extent that any liability under any law cannot be excluded, no liability for any loss or damage which may be suffered by any person, directly or indirectly, through relying upon any information or statement in this guidance is accepted by Commonwealth Bank of Australia, any of its subsidiary companies, any of its directors, employees or agents, whether that loss or damage is caused by any fault or negligence on their part or otherwise.The Accelerator Cash Account and Term Deposit are products of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (‘Bank’) and are administered by Australian Investment Exchange Ltd ABN 71 076 515 930 AFSL No. 241400 (‘AUSIEX’) under the brand CommSec Adviser Services. AUSIEX is a wholly owned but not guaranteed subsidiary of the Bank. Fees and charges apply. Please consider the General Information Statement and full terms and conditions available on application.It is your responsibility to ensure that:You have the required authorisation to advise and deal in these financial products and strategies.These products are approved and appear on your licensees approved product list.You meet the ‘know your product’ and ‘know your client’ obligations, as well as the best interests duty and all other advice related obligations in the Corporations Act 2001.Any clients are referred to the offer document when considering the Commonwealth Bank Cash Management Services.That any additional information or analysis (ie cash flow analysis, fee disclosure etc) is provided to the client in the required form to meet the reasonable basis of advice and SOA content requirements.RECOMMENDATIONThe effective management of personal cash flow is the foundation to any long term wealth creation strategy.Based on my understanding of your financial situation, I recommend that you use a specialised cash account to undertake a cash flow management strategy. The cash account will support and complement your <investment/SMSF> strategy by acting as a cash hub for all incoming and outgoing payments.I recommend that you establish a cash reserve so you can meet unexpected expenses and <state the basis of this recommendation and how it meets the client’s objective> without interrupting your longer term investment strategy.BENEFITSYour funds will be readily accessible with the ability to transfer to alternate investments or withdrawn as cash for personal purposes.Capital preservation - your money is invested in a very secure product.Balances of up to $250,000 per investor, per institution are currently guaranteed by the Australian Government under its Financial Claims Scheme, depending on your circumstances. This guarantee may change at any time.This is a low-cost cash management service with no account keeping fees.You will generate income from the interest earned.You will receive a competitive interest rate.It allows surplus liquidity to be easily transferred to a linked Term Deposit.The Accelerator Cash Account (ACA) is recommended as an effective mechanism to facilitate your investment activity, linking your<investment activity description, ie share trading> to a high interest bearing cash account.The Accelerator Cash Account (ACA) is a product offered by the Commonwealth Bank of Australia (CBA) and is a convenient method for managing your cash flow needs by combining the features and access of an everyday bank account with the ability to effectively facilitate and support your investment strategy.The Accelerator Cash Account (ACA) can be used as a settlement account for share trade settlement, to receive dividend payments and/or simply as an everyday bank account. The account can also be accessed via NetBank, phonebanking, ATMs, EFTPOS and direct debit.The Accelerator Cash Account (ACA) offers a competitive interest rate, with interest calculated daily on your entire balance and paid quarterly. There are no account keeping fees either. For a detailed view on fees please refer to the Standard Fees and Charges brochure.The Accelerator Cash Account (ACA) offers a direct link to a Commonwealth Bank Term Deposit. As required, you will be able to transfer funds from your ACA to a linked Term Deposit quickly and easily. Term Deposit payments (interest and maturity) can also be directed back into your ACA.The Accelerator Cash Account (ACA) will allow me to view your ACA transactions and efficiently manage your cash flows via daily data feeds into my planning software.<Insert other>CASH FLOW IMPLICATIONSBased on an initial investment of $XXX,000 and at the prevailing interest of xx%, interest of $XXX per <fortnight/month/quarter/annum> would be paid to you.Interest will be paid at maturity and can be paid to a nominated external bank account.<Nil/other>TAXATION IMPLICATIONSThe interest earned may form part of your assessable income and may be taxed at your marginal tax rate.Redeeming your existing investment/s will result in a Capital Gains Tax assessment. I anticipate that this transaction will realise a<capital gain of $XXX / capital loss of $XXX>. You should confirm the implications with your registered tax agent.RISKS AND DISADVANTAGESThe return on cash investments over the long term is typically lower than that from other asset classes such as shares and property.The amount of interest earned may vary if interest rates fluctuate.The real value of your cash investments may be eroded by inflation.If you have cash invested in a term deposit and choose to withdraw before the maturity date, 31 days’ prior written notice will be required and a prepayment adjustment and administration fee will apply.Withdrawing funds from your existing investment to establish a cash reserve may result in a Capital Gains Tax event.OTHER CONSIDERATIONSI have considered a number of alternate cash products as part of this recommendation. I believe the product I have recommended is best suited to your needs because <insert reasons>.HOW DO YOU EXIT THIS STRATEGY?You can withdraw your cash balance in the ACA at any time.You may withdraw your cash invested in a term deposit on the maturity date. You may withdraw before the maturity date, however 31 days’ prior notice will be required and a prepayment interest adjustment and administration fee will apply.FEE DISCLOSUREThe table below sets out the amounts <Dealer Group name> and I will receive from the fees you are charged. All payments listed below are inclusive of GST (where applicable).CLIENT NAME<CLIENT NAME>HOW MUCH IT WILL COST YOU1AMOUNT PAID TO <DEALER GROUP>2AMOUNT PASSED ON TO ME3UPFRONTONGOINGUPFRONTONGOINGUPFRONTONGOINGIMPLEMENTATION FEE$XX$XX$XXNAME OF PRODUCT<Recommended product>INVESTMENT AMOUNT$X,XXXMANAGEMENT COST$XXADVISER FEE$XX$XX$XX$XXTOTAL UPFRONT$XX$XX$XXTOTAL ONGOING$XX$XX$XX* The calculation of ongoing costs are based on the net amounts invested, after the deduction of upfront costs.1 This is how much you will pay.2 Paid out of the fees you are charged by me. Not an additional cost to you.3 This is the maximum amount I will be paid from the fees you are charged. Please refer below and to my Financial Services Guide (FSG) for more information about how I am paid.WARNINGThis SOA may be based on incomplete or inaccurate information. Before you act on this SOA or any further advice, you should carefully consider the appropriateness, suitability and completeness of the advice having regard to your overall personal circumstances, including any facts or circumstances that you have not made known to your adviser.This SOA may cease to be appropriate if your personal circumstances change. Please notify your adviser of any changes in your personal circumstances. This SOA will remain current, and be based on information supplied through your personal profile, for a period of <<term>> days from the date of this document. ................
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