As one of our clients recommends, it is important to firstly visit at least three financial planners before you make your decision. Most planners do not charge for an initial appointment.
My advice for others is to visit two or three non-aligned financial planners and then to choose the one that you are most happy with. Your plan can be structured to suit the degree of risk you are happy with - It can be all "money in the bank" or any risk level the client is comfortable with.
For young people, I advise them to start their financial planning early. It works for retired people too: I have found that some people my age don’t seem to have the taxation benefits that we have, so I am very happy to recommend Capricorn Investment Partners Limited.Retired Beef Producer
The questions below can help you to decide which financial planner to engage.
CIPL is an unlisted company (ABN 26 095 998 771, Australian Financial Services Licence No. 237435) and has about 50 shareholders.
CIPL (formerly The Rock Investment Planning Limited) began offering financial advice in June 2001. The Rock Investment Planning got its own Financial Services Licence towards the end of 2001. Effective 1 February 2006 the company was purchased from The Rock Building Society and now operates as Capricorn Investment Partners Limited.
Selecting a Financial Planner who is not aligned with any financial product or service will help to minimise any conflicts of interest. The construction of your portfolio and its performance can sometimes be compromised by recommendations of "in-house" investments. Identifying the owners may sometimes take some investigative ability!
One effective way of identifying if they are aligned is to ask them whose Financial Services Licence they are authorised to use. If the business is owned by an organisation which, in turn is owned by a financial institution which promotes their own branded investment products then they are likely to explain that they operate under XYZ’s Financial Licence. If you are not satisfied with the answer ask them if they are a boutique financial planning firm. Some financial planning firms who are independently owned described themselves as "Boutique Financial Planners".
If the business is independently owned, they are more likely to operate under their own Financial Services Licence. In that case then, the Financial Planners are more likely to be free to recommend investments that are in your best interests.
Most financial planners get commissions from the products they sell, but a few run their business on a fee for service basis. Traditionally the commission model has been the preferred model for financial planning businesses. However, investors are now becoming more discerning and recognise the potential for conflicts of interest when the commission model is followed.
These potential conflicts of interest arise when the Financial Planner receives commissions for the investment products that they recommend. As an investor, you cannot be sure that the recommendation of these products is always in your best interests. When you buy a new Toyota from a Toyota dealer, you are aware that the salesman will be paid a commission if you buy from that person. However they do not disclose whether the salesman earns more commission if you buy one model as opposed to another model. Similarly, when a Financial Planner recommends a particular investment product, the commission that the planner receives may not be easily identified.
In CIPL’s fee for service Financial Planning business our research team is responsible for investigating the full range of investment products, and for then making appropriate recommendations to our clients.
While there are some good financial planners who charge commissions, CIPL believes that the fee for service model works in the best interests of clients.
The benefits for clients include:
One unsavoury feature of the financial planning industry is the hard sell approach undertaken by some planners. These people often recommend products promoted by their firm and that mightn’t be in your best interest. If you feel you are being pressured, it is best to remember that for all but the simplest of situations a quality set of recommendations is unlikely to be made on the spot. So insist on something in writing, and read it carefully.
The biggest issue in finding a financial planner is to find someone who is competent, whom you can trust.
As one of CIPL's clients has recommended:
Having a Financial Planner who is not aligned with any financial product gives me the confidence that my Financial Advisor has my best interests at heart.
CIPL has an Asset Selection Committee whose members include David French, Managing Director and Senior Financial Planner, Justin Baiocchi, Financial Planner, Bob Stewart Senior Advisor and Sue Dunne, Financial Planner. Further information on their experience and qualifications can be found here.
CIPL’s research process is underpinned by the objective to build portfolios that meet the following requirements:
CIPL utilises a panel of brokers who provide us with a wide range of independent research. Research reports and market and investment news is received daily from the broker panel. This is augmented with daily deliveries of The Australian and the Australian Financial Review newspapers. In addition CIPL subscribes to other information sources including:
The Asset Selection Committee meets weekly to review the current investment environment and to asses any changes to the Select Portfolio. The Select Portfolio is a list of current investments that the Asset Selection Committee believes are suitable investments for new or existing clients, subject to each client’s risk profile and income or growth needs.
As CIPL is not tied to any financial institution or is expected to promote any particular financial product, neither CIPL, nor their advisors receive any commission related to financial products. CIPL’s advisors are paid a salary and in some cases may receive an annual bonus which is related to the company’s profit for that year.
Fees and charges are negotiated between you and your advisor. Your first consultation is free.
If you ask us to continue to work for you details of charges are as follows:
If you are comparing our fees, make sure our competition has told you all their fees.
There are no entry fees charged on investments. Where stock market-listed investments are recommended, standard brokerage will be charged on a purchase or sale of the investment. This is charged at 0.55% of the transaction value (with a minimum fee of $55).
Our approach regarding fees is to disclose all direct and incidental fees in a clear and easy to understand format on one page in your financial plan. This is different from the industry norm, which requires financial planners to disclose only those commissions and fees which are paid by you directly. In many cases, investors who opt for commission-based financial advice end up paying a range of hidden fees. Our fee quotes include all advisor, administrative and set-up costs that you are likely to incur. The only exceptions are stamp duty on certain asset purchases and specialist consulting services. All fees quoted include GST.
CIPL has a web based client portal which enables clients to view their portfolios online. Clients are able to run taxation, income and performance reports that are required for management and taxation purposes. These reports show the original purchase price of each investment and the current price and are available for downloading at the end of each quarter.
Quarterly reports are produced which show the valuation of each portfolio. These reports include the Internal Rate of Return (a standard measure for showing the time-weighted performance of an investment) for the last rolling 12 months and since the portfolio's inception. These and other reports are available at any time via the Client Portal.
CIPL’s clients can view their portfolio over the internet using the secure Client Portal. Using a unique username and password, clients are able to view current and historical portfolio valuations and run a range of reports.
The reports include distribution reports, income and expenses reports, investment transactions, realised gains/losses, mark-to-market and income summaries.
Clients are also able to view and authorise their investment purchases through the Client Portal.
Prior to purchasing or selling any investment, each client is sent an Authority to Proceed (ATP). The ATP is a document containing our investment recommendation, details on the investment and our reasons for making the recommendation. The ATPs are provided in either electronic or hard-copy form.
If you do not wish to take the recommended investment you can simply inform us of your wishes. We will not take any investment action without your permission. The only exception to this is where time-sensitive action is required, for example in the case of rights issues. If there is insufficient time for us to contact you to arrange your approval, we will take the necessary action if we deem it to be value-adding.
We will provide you with both quarterly and annual reports on your investment portfolio. These reports can also be generated at any time through your online portfolio reporting system.
Reports are available in both electronic and hard copy formats.
After we collect all your financial data including your objectives and establishing your risk profile, CIPL Financial Planners develop your Statement of Advice. CIPL’s Financial Planners are not paid on commission and do not receive commission on the products that they recommend. CIPL’s Financial Planners do not receive any “soft dollar” benefits such as cash gifts, travel and other benefits.
From time to time, CIPL may invite clients to social events or to seminars or market updates.
You are the beneficial owner of any investments that we hold on your behalf. Each client is allocated a unique Holder Identification Number (HIN) by CHESS (a registry tool operated by the Australian Stock Exchange), under which all your investments are recorded.
CIPL cannot offer your investments as security or make any claim on the assets.
Portfolios are always constructed with your risk profile in mind. We cannot guarantee individual investments, but we always endeavour to build a portfolio that meets your requirements for capital gain, income and risk. We do this by constructing diversified portfolios with a focus on income generating investments.
CIPL's Financial Planners and Advisors are David French, Bob Stewart and Sue Dunne.
David French, CIPL’s Senior Financial Adviser has worked in finance since 1994. David worked initially in stockbroking and funds management and prior to that worked as a business analyst, an industrial analyst and a consultant economist. Other professional experience includes two years as an Analyst with Portfolio Partners Limited (a very successful fund manager), and prior to that, two years with Swiss Bank Corporation (now UBS Warburg).
In 2001, David established The Rock Investment Planning as a subsidiary of The Rock Building Society. After five years of significant growth the company was purchased by employees and other investors. David has continued in his role as Senior Financial Advisor at CIPL and so has worked as a Financial Planner since 2001.
Bob Stewart’s knowledge of the financial markets was developed through a career spanning 36 years in the securities industry working as a Stock Broker, Securities Dealer, Branch Manager and Client Adviser for several brokerages including C. J. Edwards & Co., Lance Jones Limited and Credit Suisse First Boston Australian Equities Private Limited. Bob is CIPL’s Senior Investment Adviser (Equities Dealing). He is qualified and accredited through the Securities and Derivatives Industry Association.
Sue Dunne holds a Diploma of Financial Services (Financial Planning) and has undertaken further study in financial and technical analysis and superannuation. Sue has over 25 years experience in small business and is an experienced investor in her own right. Sue has worked as a Financial Planner since June 2007.
Capricorn Investment Partners Limited is an independently owned boutique financial planning firm which specialises in providing tailored financial and investment advice for individuals and small business.
CIPL's strengths lie in the quality of our personalised service and in the expertise of our professional staff. We work in partnership with our clients and we manage their affairs diligently, and with integrity. After a careful analysis of each client’s financial situation our professional staff work with the client to develop strategies to meet their current and future needs.
CIPL is able to take the necessary steps to implement your Financial Plan or Statement of Advice. After we present you with the draft and when you are happy with the plan, you will be asked to sign an Authority to Proceed (ATP). This authorises CIPL to take the steps necessary to implement your plan, including purchase of any investments or investment structures.
We invest your money only after careful thought. That means waiting for market lows, and not purchasing investments that appear too expensive. We may contact you if large alterations to the plan are necessary. While this can cause delays, our experience is that careful purchasing is well rewarded.
CIPL’s advisors see a range of clients including:
Our clients include employees of government departments, business owners, primary producers and sports enthusiasts. About 60% of our clients have a Self-managed Superannuation Fund.
After you decide to go ahead with the development of a plan that meets your needs, we ask you to collect all the relevant data. It is useful to bring your tax returns, superannuation statements, and investment details with you. If your data is in a mess, just give us the pile and we can sort it out.
CIPL’s Financial Planners then develop your Statement of Advice (SOA). This written document can take anywhere between one and six weeks to complete, depending on the complexity of your situation.
We will often call you to collect further information, and we may contact your accountant or your solicitor. Often we will contact the Australian Taxation Office or Centrelink, and getting the right information can take time.
Once the plan is complete we will present it to you as a draft. This is your opportunity to comment on the contents and have it changed. It is also an opportunity for us to test what we have written against what you require. We will make as many changes as necessary so that you are completely happy with what we are doing. We encourage you to take the plan away and read it after the presentation. In addition to the SOA you will receive research and product disclosure statements (PDS) relating to any investments or financial products we recommend. These documents contain information on which we have based our recommendations, and in the case of a PDS, more detailed information about product costs. This information is summarised in the SOA.
The process of CIPL’s development and implementation of a Financial Plan is summarised below:
|1. First Meeting||An opportunity for us to get to know each other. This meeting is free.||If the client decides to go ahead with the plan your advisor will ask you to bring in your financial data for your next visit.|
|2. Data Collection||Your advisor will establish your risk profile.||Decision to develop your financial plan.|
|3. Writing the Statement of Advice||Your Advisor will consult with CIPL planners in the formulation of your SOA. It will take into account your individual financial circumstances.||Contact CIPL if your situation changes substantially.|
|4. Presenting the Statement of Advice (Initial Draft for comment)||Your advisor will present the Draft SOA for your comment.||Take the plan home for consideration.|
|5. Implementing the Plan||If you decide to go ahead with the SOA, CIPL will implement your plan.||Contact CIPL if your situation changes substantially.|
|6. Ongoing Care||CIPL undertakes to review your portfolio and your overall financial situation on an ongoing basis. This is included in the portfolio management fee.||Clients are free to visit or call to discuss their portfolio. They are also able to view their portfolio online. Reports can be downloaded at the end of each quarter.|
CIPL formally reviews each client’s portfolio every six months. There is no additional charge for this service. Additional services included in CIPL’s portfolio administration fee include:
As our clients lives change so do their plans. CIPL’s ongoing management service is designed to relieve our clients of the chores of looking after their investment portfolio, while still retaining maximum flexibility.
CIPL encourages their clients to visit or contact us whenever they have a question. We will contact our clients if there is anything new to tell them about, particularly if we have a concern about their portfolio, or if there is a new investment we think they should consider.
Under our ongoing care service we undertake to work with our client’s accountant, and deal with tax and social security matters. CIPL’s ongoing service includes liaising with Centrelink and ensuring that clients operate within their guidelines.
CIPL’s goal is to meet your needs as a long-term client. Many of our clients have developed into “business friends”.
CIPL’s development and implementation of a Financial Plan is summarised above. CIPL’s advisors are employed because of their superior planning skills and for their high level communication skills. However, in some cases some clients may have some issues with our recommended strategy. In these cases we encourage our clients to visit or call to discuss their concerns. In most cases we are able to resolve the issues and meet the needs of the client.
Click here for a detailed description of our planning and implementation process.
CIPL recognises that complaints can be an opportunity to fine-tune our services. We do all we reasonably can to avoid having a complaint escalate into a dispute or litigation. We have an internal complaint handling procedure which meets the regulatory requirements.
If you have a complaint, contact your Advisor or CIPL’s Compliance Manager to inform them of your complaint.
If the complaint is not satisfactorily resolved within five working days please write to:Mr Ted Scott
Human Factor Australia is contracted by Capricorn Investment Partners Limited to provide a quick and convenient avenue for dispute resolution for our clients.
If you still do not obtain a satisfactory outcome, you have the right to complain to the Financial Ombudsman Service Limited (member number 11108) on 1300 780 808 or in writing to:Financial Ombudsman Service
The Australian Securities and Investments Commission can also be contacted on 1300 300 630 if you have a complaint or wish to obtain information about your rights.
Please note that CIPL has adequate Professional Indemnity Insurance as per ASIC’s regulation.
CIPL has an Australian Financial Services Licence (AFSL No 237435) and we licensed by ASIC to give financial advice on the following:
Always check that the company has a current financial services licence. You do this by conducting a search on the ASIC website (http://www.search.asic.gov.au/fsr/flb.html) Find the search facility on the home page by following the links to Search ASIC registers, other registers, AFSL licensees. You will need the AFSL Number or the individual or company name.
Conducting this search will also help you identify if the company is tied to any financial institution or any particular investment product.
As a Financial Services provider we are in the business of assisting our clients to achieve their financial objectives. To do this we appoint staff who meet and exceed ASIC’s regulatory requirements. To ensure that our representatives continue to maintain the required level of skills and knowledge CIPL has a monitoring and supervision program that meets our internal needs and our legislative and regulatory obligations. Ongoing training is mandatory for CIPL Financial Planners and CIPL’s key staff undergo ongoing professional development to ensure that our high level of professional expertise is maintained.
CIPL is committed to employing staff whose attitudes, qualifications, skills and knowledge ensure that they meet our clients’ needs for high quality, independent financial advice.
CIPL’s advisors have been providing sound financial advice since 2001. Please see our testimonials page to see what our clients think of us.