HUB24 Super Supplementary Product Disclosure Statement

Transcription

1 HUB24 Super Supplementary Product Disclosure Statement 25 January 2013 HUB24 Super equity trading enhancement This document is a supplementary product disclosure statement (SPDS) of the Product Disclosure Statement for HUB24 Super dated 4 June 2012 (PDS), and the previous Supplementary Product Disclosure Statement dated 25 September It supplements and must be read in conjunction with the PDS and previous SPDS (if applicable). HUB24 Super is offered from the HUB24 Super Fund, ABN (the Fund).

2 About this Supplementary Product Disclosure Statement HUB24 Super Supplementary Product Disclosure Statement This SPDS is issued by The Trust Company (Superannuation) Limited (ABN , AFSL ) (Trustee). It provides updated information about trading in securities via the Fund, as well as changes to unclaimed money rules applicable to superannuation funds. HUB24 Super offers accumulation, account-based pension and transition to retirement pension accounts. The Fund provides investment choice, flexibility and transparency in building your super savings and drawing a pension in retirement. In particular, the Fund provides investors with access to a wide range of investment options including listed securities such as Australian shares and exchanged traded funds (ETFs). Through your adviser you can engage in direct trading of Australian shares and ETFs on the Australian Securities Exchange. Currently, the HUB24 trading platform aggregates any buy and sell orders for listed securities for members and places the net trades on the market once a day at a weighted average price. This is referred to as Aggregated Trading. New technology has been developed to allow advisers to place, cancel and amend direct to market orders for a HUB24 Super account. This is referred to as Direct Market Trading enhancement. Members (through their advisers) will have the option to invest in listed securities on an Aggregated Trading basis or using the HUB24 Super Direct Market Trading enhancement. The Direct Market Trading enhancement will become available to any new members joining the Fund on or after 1 March 2013 who wish to invest in listed securities. Any trading in securities (whether Aggregated Trading or via Direct Market Trading enhancement) on the Australian Securities Exchange is subject to the rules and regulations of the exchange and the Australian Securities and Investments Commission (ASIC). Current brokerage fees (of 0.11% of the trade value) will apply in both cases, however trades in listed securities using the Direct Market Trading enhancement will be subject to a new minimum of $22 per trade. * * * This SPDS contains terms and conditions applicable to the HUB24 Super Direct Market Trading enhancement. This SPDS replaces or adds to information in the HUB24 Super PDS dated 4 June In particular: some information in this SPDS about available securities (specifically, Australian direct shares and ETFs) and how they may be traded replaces information about available securities shown in section 5 of the PDS. some information in this SPDS about fees and costs (specifically, brokerage for securities depending on the trading process used) replaces information about brokerage shown in the Service fees table in the Additional explanation of fees and costs appearing in section 9 of the PDS. In addition, this SPDS replaces and adds information to Booklet B: Investment Guide (which forms part of the PDS) as follows: the information in this SPDS about trading in securities replaces information under the heading Netting of trades shown in The building blocks of your investment strategy section of the Investment Guide. 2 HUB24 Super_Supplementary PDS_Jan2013_v1

3 Information in the PDS may change from time to time. The Trustee may update information, which is not materially adverse to you, without advising you. Updated information can be obtained from You may request a paper copy of any updated information from HUB24 at any time, free of charge by calling us on , or from your adviser. If a change occurs which is materially adverse to you the Trustee will reissue the PDS or issue a supplementary PDS and notify you of the change, as required by law. Your adviser will also provide you with a Statement of Advice and other disclosure documents relevant to your investment options. These disclosure documents are also available from or by calling The information contained in this SPDS is general information only and does not take into account your individual objectives, financial situation, needs or circumstances. The suitability of the Fund to your needs, and the suitability of a particular investment option within the Fund, depends on your individual circumstances and objectives. You should discuss these in detail with your adviser before investing in the Fund. The Trustee will only accept investors to the Fund through a financial adviser (adviser). HUB24 is not authorised to provide personal financial advice. You must consult an adviser before investing through the Fund. The Fund is only available to Australian tax residents who receive this PDS, whether in paper or electronic form, in Australia (unless otherwise approved by the Trustee and HUB24). Investors who receive this document in electronic form are entitled to obtain a paper copy free of charge by contacting us. The distribution of the PDS in jurisdictions outside Australia may be restricted by law and persons who obtain the PDS and related documents should inform themselves about, and observe any such restrictions. Failure to comply with those restrictions may violate those laws. The Trust Deed is a document that sets out the governing rules of the Fund. A copy of this document is available upon request by writing to HUB24 at the address below. The Trust Company (Superannuation) Limited and HUB24 Custodial Services Ltd (and each of their subsidiaries) do not guarantee the performance of the Fund. Investments in the Fund are subject to investment risk, including loss of income and capital invested. Neither The Trust Company Limited (the Trustee s parent company) nor any of its related entities guarantee or have any liability in connection with the performance by the Trustee of its obligations under the PDS. How to contact us HUB24 Super Phone: admin@hub24.com.au Post: HUB24 Super, GPO Box 529 Sydney NSW 2001 HUB24 Super Supplementary Product Disclosure Statement HUB24 Super_Supplementary PDS_Jan2013_v1 3

4 Section 5 Investment options Page 13: Table of investment options Replace the existing text in the row headed Exchange traded funds (ETFs) with the following: Category Exchange traded funds (ETFs) Description Exchange Traded Funds (ETFs) are investment funds, traded on an exchange, that invest in a basket of securities or other assets and that generally seek to track the performance of a specified index or benchmark (such as the S&P/ASX 200 Index). They are typically registered managed investment schemes and investors hold units in a unit trust rather than shares in a company that operates the investment fund. Each ETF security (or unit) represents an interest in a portfolio of securities, currencies or commodities. The Fund provides a broad selection of ETFs. In consultation with your adviser you can invest in a selection of ETFs. Your orders to buy and sell will be placed, through your adviser, either on an Aggregated Trading basis or an individual basis using the Direct Market Trading enhancement. Aggregated Trading involves netting of trades at a Fund level (using weighted average prices), while the Direct Market Trading enhancement enables you to undertake trading via your adviser at an individual (member account) level including by specifying the price at which orders are placed and other parameters for your order. Further information about direct trading in ETFs, including the differences between available trading approaches, is shown in the Investment Guide and on the workbench. You (through your adviser) can choose which trading approach to take. HUB24 Super Supplementary Product Disclosure Statement Replace the existing text in the row headed Australian shares with the following: Category Australian shares Description In consultation with your adviser, you can invest in a selection of direct share securities. The Fund provides a broad selection of direct share securities predominantly from the S&P/ASX All Ordinaries Index. Your orders to buy and sell will be placed, through your adviser either on an Aggregated Trading basis or an individual basis using the Direct Market Trading enhancement. Aggregated Trading involves the netting of trades at a Fund level (using weighted average prices), while the Direct Market Trading enhancement enables you to undertake trading via your adviser at an individual (member account) level including by specifying the price at which orders are placed and other parameters for your order. Further information about direct trading in shares, including the differences between available trading approaches, is shown in the Investment Guide and on the workbench. You (through your adviser) can choose which trading approach to take. Section 9 Fees and other costs Page 29: Table of service fees Replace the existing text in the row headed Brokerage for securities with the following: Type Amount How and when paid Brokerage for securities Approximately 0.11% of the value of each transaction, subject to a minimum of $22 per trade in relation to trades in securities (including ETFs) via the Direct Market Trading facility. This fee is paid in addition to the cost of the trade for securities within the non-unitised portfolio and portfolio blends sleeves. For direct trading in securities under the Direct Market Trading enhancement, this fee is subject to a minimum of $22 per trade. Refer to the Investment Guide for more information about the Direct Market Trading enhancement. This fee is deducted at the time of the transaction. 4 HUB24 Super_Supplementary PDS_Jan2013_v1

5 HUB24 Super Investment Guide Page 10: Replace the section titled Netting of trades with the following: Trading in Securities In consultation with your adviser you can invest in a selection of ETFs and Australian direct shares. Trading in securities can occur in one of two ways, as determined by you and your adviser. You have the option to undertake trades in securities using either the following approaches: Aggregated Trading Direct Market Trading Aggregated Trading involves netting of trades, at a Fund level, with a weighted average price applicable to relevant members. The netting of trades is described in further detail below. The Direct Market Trading enhancement involves individualised trades, with the ability (through your adviser) to place, cancel and amend market orders and specify a price at which the orders are placed or other parameters for your order. The orders are placed directly to market (subject to usual market rules). This process may result in higher transaction costs for you. See below for an explanation of key differences between the trading options available to you. With the Direct Market Trading enhancement, your adviser will implement your instructions relating to buying or selling of Australian shares or ETFs, including: The individual Australian share or ETF that is being bought or sold Whether the order is a to buy or sell that share or ETF. Your instructions might also include the following pricing or order parameters, otherwise your adviser may determine these parameters: Whether the order is a Limit Order or Market to Limit Order. A Limit Order is an instruction to buy or sell a security at a specified price or better. A Market to Limit Order is an instruction to buy or sell at the current market price. After the first portion of the order is completed the remainder of the order is immediately converted to a limit order at that executed price Whether any incomplete part of the order should be cancelled at the end of the day or remain in the market until a cancellation instruction is given. Further information about the characteristics of the Direct Market Trading enhancement can be found on the workbench. Netting of Trades (excluding trades via the Direct Market Trading enhancement) HUB24 calculates the trades required due to non-unitised portfolio and portfolio blend switching, rebalances, new investments or withdrawals, except for trades conducted using the Direct Market Trading enhancement. We then internally match or net off any buy and sell trades where possible, reducing the number of buy and sell orders that need to be placed in the market. All trades are settled at the settlement price of the applicable trade. This netting process may result in lower transaction costs for you. HUB24 Super Supplementary Product Disclosure Statement HUB24 Super_Supplementary PDS_Jan2013_v1 5

6 Where possible, netting of transactions occurs within your account (internal netting) where relevant, as these transactions do not incur brokerage. Externally-netted trades incur brokerage along with market trades. The trade price is used for all transactions, but if the netting is exact, meaning no market trades are placed, then we use the end-of-day price. Differences between Aggregated Trading and the Direct Market Trading enhancement For trading in securities using the Direct Market Trading enhancement, a minimum brokerage of $22 per trade applies. Other key differences include that the Direct Market Trading enhancement provides the ability to specify order parameters including price and duration of an order. For further information about the differences contact your adviser. HUB24 Super Supplementary Product Disclosure Statement 6 HUB24 Super_Supplementary PDS_Jan2013_v1

7 HUB24 Super Member Guide Section 6 Transfers Page 18: Replace the section titled To the Australian Taxation Office with the following: From 31 December 2012, we will be required to pay your account balance to the ATO as unclaimed money where: we have lost contact with you and your account balance is less than $2,000, or your account balance has been inactive for 12 months and, with the information reasonably available to us, we re satisfied that we will never be able to pay your account balance to you. These circumstances in which account balances must be transferred to the ATO may change in the future, and we will be required to comply with them if they do. Any future changes may be made available on our website at You can also find more information about unclaimed money at HUB24 Super Supplementary Product Disclosure Statement dy HUB24 Super_Supplementary PDS_Jan2013_v1 7

8 4 June 2012 HUB24 Super offers accumulation, account-based pension and transition to retirement pension accounts. HUB24 Super provides investment choice, flexibility and transparency in building your super savings and drawing a pension in retirement.

9 4 June 2012 Super how does it work? This guide gives you an understanding of how super works for you. 4 June 2012 This guide outlines some of the basic principles of investing and the investment options in HUB24 Super. 4 June 2012 This guide gives you an understanding of how the insurance cover available through HUB24 Super works for you. Non-Unitised Portfolio Disclosure Document for Investors dated 4 June The Portfolio Manager is Bennelong Funds Management Ltd. Issued by The Trust Company (Superannuation) Limited ABN AFSL No About this Product Disclosure Statement This Product Disclosure Statement (PDS) is a summary of significant information about HUB24 Super (the Fund) and contains a number of references to important information in other booklets (all of which form part of this PDS). You should consider that information before making a decision about the Fund. The PDS for the Fund, dated 4 June 2012, is issued by The Trust Company (Superannuation) Limited (ABN , AFSL ) (Trustee). To satisfy capital requirements under superannuation legislation, the Trustee has the benefit of an approved guarantee of $5 million from a financial institution (in respect of the due performance of its duties). A copy of the approved guarantee is available for perusal at the Trustee s offices. The fund is promoted by HUB24 Custodial Services Ltd (ABN , AFSL ) (HUB24). You should read this PDS carefully as it outlines the features, costs, benefits and risks of investing in the Fund. This document may also help you compare this product with others. It is important that you read the entire PDS, including the terms and conditions, so you can understand how the Fund works. A reference to the PDS includes a reference to the following booklets which contain more detailed information on topics in the PDS. You should also read each of these booklets carefully where they are relevant to your investment in the Fund. Booklet A: Member Guide Super how does it work? this guide gives you an understanding of how super works for you. Booklet B: Investment Guide this guide outlines some of the basic principles of investing and the investment options in the Fund. Booklet C: Insurance Guide this guide gives you an understanding of how the insurance cover available through the Fund works for you. Booklets D: Non-Unitised Portfolio/Portfolio Blend Disclosure Document this document outlines the investment strategy, philosophy and objective of the manager of the relevant non-unitised portfolio or portfolio blend a disclosure document for each non-unitised portfolio and each portfolio blend is available on and is uniquely identified with the letter D and a subsequent number. HUB24 Super Member Guide Booklet A Member Guide Super how does it work? HUB24 Super Investment Guide Booklet B Investment Guide HUB24 Super Insurance Guide Booklet C Insurance Guide Bennelong Ex-20 Australian Equities Portfolio Booklets D Non-Unitised Portfolio/ Portfolio Blend Disclosure Document These booklets may change from time to time and are available free of charge on our website at or you can request a paper copy by calling us on ii

10 Your adviser will also provide you with a Statement of Advice and other disclosure documents relevant to your investment options. This could include: Non-Unitised Portfolio/Portfolio Blend Disclosure Document product disclosure statements for each managed fund you invest in fact sheet for ETFs general information on the direct share securities information guide on the term deposits. All these documents are available on the HUB24 Super section of our website and the workbench (see page 3 for more information about the workbench). The information contained in this PDS is general information only and does not take into account your individual objectives, financial situation, needs or circumstances. The suitability of the Fund to your needs, and the suitability of a particular investment within the Fund, depends on your individual circumstances and objectives. You should discuss these in detail with your adviser before investing in the Fund. The Trustee will only accept investors to the Fund through a financial adviser (adviser). HUB24 is not authorised to provide personal financial advice. You must consult an adviser before investing through the Fund. Information in the PDS may change from time to time. The Trustee may update information, which is not materially adverse to you, without advising you. Updated information can be obtained on our website at You may request a paper copy of any updated information from HUB24 at any time, free of charge by calling us on , or from your adviser. If a change occurs which is materially adverse to you the Trustee will reissue the PDS or issue a supplementary PDS and notify you of the change, as required by law. The Fund is only available to Australian tax residents who receive this PDS, whether in paper or electronic form, in Australia (unless otherwise approved by the Trustee and HUB24). Investors who receive this PDS in electronic form are entitled to obtain a paper copy of this PDS (and the Application Form) free of charge by contacting us. The distribution of the PDS in jurisdictions outside Australia may be restricted by law and persons who obtain this PDS should inform themselves about, and observe any such restrictions. Failure to comply with those restrictions may violate those laws. The Trust Deed is a document that sets out the governing rules of the Fund. A copy of this document is available upon request by writing to HUB24 at the address below. The Trust Company (Superannuation) Limited and HUB24 Custodial Services Ltd (and each of their subsidiaries) do not guarantee the performance of the Fund. Investments in the Fund are subject to investment risk, including loss of income and capital invested. Neither The Trust Company Limited (the Trustee s parent company) nor any of its related entities guarantee or have any liability in connection with the performance by the Trustee of its obligations under this PDS. About HUB24 Custodial Services Ltd HUB24 Custodial Services Ltd (HUB24) is the Promoter of the Fund and has been appointed by the Trustee to provide various services in relation to HUB24, including investment administration, investment management and custody services. The Trustee pays HUB24 for providing these services and these costs are paid out of the fees paid by members (directly or indirectly), as set out in this PDS. iii

11 HUB24 may sub-contract the performance of some or all of its functions to other professional service providers, at no additional cost to you. Other service providers of the Fund include: Sub-custodians As at the date of this PDS, HUB24 has appointed the following sub-custodians in relation to the Fund: HSBC Bank Australia Limited (HSBC) (ABN , AFSL ) Australian Market Automated Quotation (AUSMAQ) System Limited (ABN , AFSL ). The sub-custodians hold physical title to the assets held within the Fund in custody on behalf of the Trustee. Insurer TAL Life Limited (TAL) (ABN , AFSL ) (formerly TOWER Australia Limited) Auditor of the Fund UHY Haines Norton Chartered Accountants Member administrator DIY Admin Pty Ltd About the Fund The HUB24 Super Fund (ABN ) (the Fund, HUB24 Super) is a public offer superannuation fund which provides accumulation, account-based pension and transition to retirement pension accounts. The Fund was established under a trust deed dated 11 May The Trust Company (Superannuation) Limited (ABN , AFSL ) is the Trustee of the Fund. HUB24 Custodial Services Ltd (ABN , AFSL ) (HUB24) is the Fund s Promoter and has been appointed by the Trustee to provide other services to the Fund. How to contact us Phone: HUB24 Administration Assistance: Fax: (02) admin@hub24.com.au Post: HUB24 Custodial Services Ltd, GPO Box 529 Sydney NSW 2001 iv

12 Contents 1 Features at a glance 1 2 Benefits of HUB24 Super 3 HUB24 workbench 3 How the Fund works 4 3 How super works 5 Contributing to super 5 Withdrawing your super 6 4 Risks of super 8 Managing risks 8 Risks associated with the Fund 9 Risks associated with investments 10 5 Investment options 11 Discussing your options with your adviser 12 Changing your choices 12 Diversifying your investments 12 Table of investment options 12 Diversification investment limits 14 Default investment choice the cash account 14 Interest and fee accruals 14 Labour standards and environmental, social and ethical considerations 15 Trustee s selection process for the investment options 15 Illiquid investments 15 Changes to the investment options 15 6 Insurance in your super 16 Applying for insurance 16 When cover starts 16 When cover ends 17 Benefit exclusions and restrictions 18 Pre-existing conditions 18 Interim Accident Cover 19 Cost of cover 19 Transferring cover 20 Important information 20 7 How to open an account 21 How to contribute to your account 21 How your contributions are treated 22 Transferring other super money to the Fund 22 v

13 8 The role of your adviser 23 Important information 23 9 Fees and other costs 25 Did you know? 25 To find out more 25 Example of annual fees and costs for a balanced investment option 27 Super 27 Pension 27 Additional explanation of fees and costs 28 Account-keeping fee 28 Administration fee 28 Investment costs 28 Performance fees 28 Service fees 29 Buy/sell spread 29 Expense recovery fee 30 Insurance costs 30 Adviser remuneration and fees 30 Tax 31 Increases or alterations to fees and charges How super is taxed 33 Providing your Tax File Number 33 Tax and your account balance Transacting in HUB24 Super 34 Your instructions 34 Trade notifications 34 In specie transfers 35 Important notes for in specie transfers 35 Trade restrictions 35 Income 36 Transacting in managed funds How we communicate with each other Other information 38 Consents 38 Privacy policy 38 Anti-money laundering/counter-terrorism financing 38 Complaints 39 Cooling-off period 39 UK pension transfer 39 About the relationship 40 Investing in the Fund vs direct investments 40 vi

14 1 Features at a glance Account types The Fund offers three account types for whatever life stage you re at: Superannuation Pensions: Transition to retirement Account-based Minimum initial deposit $20,000. A minimum administration fee applies if your account balance is below $50,000 Minimum cash balance 1.25% of your account balance Additional contributions (super only) $100 minimum (inclusive of personal and Superannuation Guarantee contributions) Regular savings and payment plan $100 minimum Methods of contribution Cheque, direct debit, Bpay, electronic funds transfer, approved in specie transfers Methods of withdrawal Electronic funds transfer In specie transfers Approved investment options may be transferred into the Fund Interest rate on cash in your account Competitive interest rate calculated daily and paid monthly on the entire cash balance of your account Investment options managed funds including: multi-sector conservative, moderately conservative, balanced, growth, high growth single-sector cash, fixed interest, property and infrastructure, Australian equities, international equities, alternatives. non-unitised portfolios actively and passively (index) managed portfolio blends an asset allocation approach which spreads your investment over various asset classes and investment options to provide for your investment strategy and determined tolerance to risk exchange traded funds (ETFs) Australian direct interest rate securities Australian direct shares term deposits Insurance options Death, Total and Permanent Disablement (TPD) and Income Protection 1

15 Death benefit nominations Binding death benefit nominations and reversionary pension options Access to your account You have access to your account through your HUB24 workbench at and, if you have an iphone, the HUB24 iphone application Fees Refer to Section 9 Fees and other costs 2

16 2 Benefits of HUB24 Super The Fund is a great way for you to build your superannuation (super) savings and draw a pension in retirement. You can choose from a large range of investment options, including: managed funds including: multi-sector conservative, moderately conservative, balanced, growth, high growth single-sector cash, fixed interest, property and infrastructure, Australian equity, international equity and alternatives. non-unitised portfolios actively and passively (index) managed portfolio blends an asset allocation approach which spreads your investment over various asset classes and investment options to provide for your investment strategy and determined tolerance to risk exchange traded funds (ETFs) Australian direct interest rate securities Australian direct shares term deposits. The Fund also offers: the option to withdraw your benefit as a lump sum, or as an account-based or transition to retirement pension, when you become eligible a very competitive group insurance arrangement with Death, Total and Permanent Disablement (TPD) and Income Protection options. For more information on the insurance arrangements available, including eligibility conditions, refer to the Insurance Guide. comprehensive investment reporting, with online and iphone access a competitive and transparent fee structure the flexibility to split contributions with your spouse binding death benefit nominations for greater estate planning certainty a simple account-based approach, in which all transactions flow through to your cash account, making it easier to manage and monitor your account. HUB24 workbench The HUB24 workbench is the online access to your account information and reporting. To make it easy for you to view all your investments, HUB24 has divided them into what we call sleeves. A sleeve is conceptually like a filing cabinet the sleeve puts your investments into different categories so you can conveniently view each sub-category of your investments. For example, the Securities Portfolio Sleeve includes securities and exchange traded funds. 3

17 How the Fund works This diagram summarises how the Fund manages and invests your super contributions. Member Pension payments Super contributions (e.g. member, employer or spouse) Transactions Purchases/ sales Investments Cash holding* * Fees, charges and taxes are deducted from the cash holding Investment Income Insurance cost Managed funds Nonunitised portfolios Portfolio blends Insurance Listed securities inc. ETFs Term deposits 24 hour access via web or iphone Reporting (consolidated investment and member reporting) This is a conceptual, simplified diagram on how the Fund works. 4

18 3 How super works Super is a long-term investment and a tax-effective way of saving for your retirement. There are restrictions on contributions to, and withdrawals from, super. There s also a variety of government incentives and tax savings to encourage you to save using super. You and your adviser can consider all these options and implement an investment strategy that will help you achieve your goals in retirement. Your super account balance is made up of the deposits to your account (including contributions and rollovers) less any fees, taxes and insurance costs paid from your account. Your account balance may not reflect all outstanding income, fees and taxes (including the tax impact of realised gains or losses). You can request a quote periodically on your withdrawal benefit, which is the amount that would be available if you request a full withdrawal. Contributing to super Superannuation Guarantee (SG) contributions Most Australian employers are required by law to contribute 9% (increasing gradually to 12% by 1 July 2019) of an employee s ordinary-time earnings to a super fund each employee nominates. These contributions are known as Superannuation Guarantee (SG) contributions. Extra contributions You may also be able to make extra contributions to your super through: additional employer contributions such as salary sacrifice contributions, which are paid from your pre-tax salary voluntary member contributions you pay from your after-tax salary. Government contributions Depending on your annual income and the type of contributions you make to your account, you may also be eligible to receive a Government co-contribution. If you are eligible, the Federal Government can contribute up to $1.00 for every dollar you contribute (subject to a maximum amount). In addition, from 1 July 2012, the Government will contribute up to $500 to low-income earners for whom eligible contributions are received during a financial year (otherwise known as a low income superannuation contribution). For more information on Government contributions, refer to the Member Guide. Transfers You can also choose to transfer your super from another fund into your account. This is often called consolidating your super, as many people have small amounts of super in multiple accounts. Consolidating can be a good way to centralise your super investments and reduce fees. What we do with your contributions Your contributions are held in the cash holding in your super account until you or your adviser tells HUB24 how you want us to invest them (see page 11 of this PDS for more information about the investment options). 5

19 Contribution limits There are eligibility rules for super contributions and extra tax applies to contributions that exceed the contribution limits set by the Government. Your adviser can explain if and how these might apply to you. For more information on contribution rules and limits, refer to the Member Guide. Withdrawing your super Super is intended to fund your retirement, so there are restrictions on withdrawing your super money before you retire. You can generally only withdraw your super once you reach age 65, or if you retire on or after the day you reach your preservation age as shown in the following table: If you were born: Your preservation age is: Before 1 July July June July June July June July June July 1964 or after 60 You may be able to withdraw some or all of your super in other limited circumstances where you meet a condition of release. These include: if you die or become permanently incapacitated if you experience severe financial hardship if you leave your employer after turning 60. For more information on conditions of release, refer to the Member Guide. Preservation rules Depending on factors such as how long you ve been contributing to super and the types of contributions you ve made, your super benefit can consist of three different categories: preserved money that must stay in super until you meet a condition of release (e.g. retirement) restricted non-preserved money you can choose to withdraw when you leave your employer unrestricted non-preserved money you can withdraw at any time. For most people, it s likely that most or all of their super will be in the preserved category. 6

20 Starting a pension A pension is an income stream that makes regular income payments. The Fund offers two types of pensions, depending on your eligibility: Transition to retirement pension a pension that can be purchased with super money once you ve reached your preservation age (see table on page 6). A transition to retirement pension allows you to receive a regular income while you re still working, but is subject to maximum withdrawal limits until you meet certain conditions. Account-based pension a pension that can be purchased with super money once you retire on or after your preservation age (see table on page 6), or meet another condition of release. You can choose the amount of pension you receive each year subject to a minimum set by law. These pension payments are tax-free for most people aged 60 and above. To start an account-based or transition to retirement pension account with the Fund, you can transfer into your pension account, your account balances from your: account in the Fund other super funds, or a combination of these. You ll first have to complete and sign a Pension Application Form and a Tax File Number (TFN) Declaration. These forms are available in the Application Forms Booklet available from your adviser or If you intend to start your pension with money from different sources, it will commence after the final amount is received. If the Fund has not received all expected amounts within 30 days of having received the first amount, your pension will start with the amounts received up to that point. Once your pension starts, you can t add any more money to it. So it s worth considering consolidating all available amounts into a single super account before starting your pension. If you intend to claim a tax deduction for personal contributions made to your super account, you need to tell HUB24 before using these amounts to commence a pension. For more information about how super works, refer to the Member Guide. 7

21 4 Risks of super Before you consider investing in the Fund, it is important you understand the risks that can affect your investment. This section provides a summary of the significant risks of investing in the Fund. You should also consider the specific risks of the investments you choose. For more information about these risks, refer to the relevant product disclosure statement or disclosure document for each investment. Your adviser can give you advice to help you manage these risks and ensure that your investment in the Fund meets your individual needs and objectives. Managing risks Here are some ways you can help to manage risks: Ask your adviser to help you formulate an investment strategy that best suits your individual needs and objectives, and select your investment options. It s extremely important you discuss your specific risks with your adviser and read the information about risk in the product disclosure statements or other disclosure documents (as applicable) for the products or investment options available through the Fund. Read all the information in this PDS, including the Investment Guide and Non-Unitised Portfolio/ Portfolio Blend Disclosure Document, for any non-unitised portfolio or portfolio blend you may be considering. Also read the product disclosure statements or other disclosure documents applicable to the products or investment options available through the Fund. Review your investment strategy at least once a year, and whenever your circumstances change (e.g. if you change jobs, buy a house or have a child). Diversify your investment strategy. Diversification is the concept of spreading your investments over a number of asset classes. The more you diversify, the less impact any one particular asset class can have on your overall investment strategy. To help manage investment risk, the Trustee has certain diversification limits in place in relation to your account. For more information about the diversification limits applicable to your account, see the Investment Guide. Consider the risks set out in the table below. This is a high-level summary of some of the general risks involved in using the Fund. Please note that you can t expect to eliminate investment risks altogether; you can only minimise them. 8

22 Risks associated with the Fund The following summary is a guide only and is not an exhaustive list of all the risks of investing in the Fund. Legal and regulatory risk There is a risk that changes to the super, taxation or other laws, regulations or rules may adversely affect your investment. Counterparty risk This is the risk that a party to a transaction fails to meet its obligations. This could include the risk that service providers appointed for the Fund may default on their obligations, which could potentially result in losses to the value of your investment. To mitigate this risk, HUB24 and the Trustee will seek counterparties and service providers that have a low risk of defaulting, and will regularly monitor the performance of those service providers. Systemic and information risk HUB24 depends on information, operations and systems which may be outside the Trustee s control. There is the risk that HUB24 may receive incorrect information or be unable to verify the accuracy of any information relied upon (e.g. product price feeds). The operations and systems used by HUB24 or the Trustee service providers may become inaccessible or malfunction, which may affect the proper and timely functioning of the Fund. Where possible, HUB24 has backup systems in place to ensure the business can resume as soon as possible, but delays may still be experienced. Advice risk Your adviser may not identify correctly your circumstances, needs and objectives and may recommend an investment strategy that is not appropriate for you. Your adviser, who must be authorised to instruct HUB24 on your behalf, may not communicate your instructions accurately to us or may not communicate them in a timely fashion. This could result in incorrect or slow investment decisions. Investment option risk The investment options you select may change or may cease to be offered in the Fund, which may affect the composition of investments in your account and your investment strategy. Investment management risk Timing risk Concentration risk The portfolio managers are responsible for designing the non-unitised portfolios/portfolio blends, and their success will depend upon their ability to successfully meet their investment objectives. They may not be successful in meeting their investment objectives. There is also the risk of the loss of key staff, which could ultimately impact the value of your investments and/or returns generated by your investment. The same risk applies in relation to the managed fund operator for any managed funds chosen. Timing risk is the risk that you invest at an unfavourable point in the investment cycle. This might mean that, at the date of your investment, your options are invested at higher market prices than those available soon after. Alternatively, it might also mean that your options are redeemed at lower prices than those that were recently available or that would have been available soon after. HUB24 has been appointed by the Trustee to perform numerous functions with respect to the Fund including administration, brokerage, custody and investment management. The Fund relies on HUB24 properly performing these functions. A failure by HUB24 to do so could result in detriment to the Fund and its members including delays, costs to replace HUB24 and increased ongoing costs if replacement service providers have to be appointed. 9

23 Risks associated with investments This summary is a guide only and is not an exhaustive list of all the possible risks of investing. Diversification risk Lack of diversification across asset classes over your entire portfolio of investments may cause your portfolio s return to fluctuate more than expected. For example, if you invest entirely in shares rather than spreading your super across the other assets classes (such as property, cash and fixed interest), share market movements could significantly affect your investment. Market risk Movements in a market sector due to, for example, interest rate movements, or economic factors that may have a negative impact on your investment and/or on the returns your investment generates. Market values can change rapidly and it s possible to lose some or all of your initial investment. Foreign exchange risk If parts of your investment are priced in a foreign currency, international factors such as exchange rate fluctuations and movements in international stock markets may affect the value of your investment. These investments may also not be hedged (protected) effectively, or at all, against exchange rate fluctuations. Sector risk There are risks associated with a particular industry s specific products or services due to, for example, changes in consumer demand or commodity prices. For instance, if one of your investment choices invests heavily in a sector such as energy, the value of your investment might change with the price of oil. Liquidity risk In difficult market conditions, some normally liquid assets may become illiquid. This could restrict the ability to sell them and to make withdrawal payments or process investment switches in a timely manner. For example, HUB24 might not be able to sell shares that are rarely traded on the Australian Securities Exchange, or that are restricted or suspended from trading. Another example might be a property trust where the underlying property (e.g. a shopping centre) takes a long time to sell. Term deposits are generally an illiquid investment as they may not be redeemable before their maturity date, as early redemption usually results in reduced returns or a penalty. If you re not sure whether the investment you choose may be affected by illiquidity, you may wish to speak to your adviser. Specific asset risk and sophisticated financial products Inflation risk Credit risk There are risks associated with specific assets, for example certain managed funds may use leverage (borrowing to invest), undertake short selling (selling shares they don t actually own) or invest in sophisticated financial products such as derivatives, futures, foreign exchange contracts and options. Use of these methods could cause large losses in proportion to the money invested in them. Before selecting these types of assets as part of your investment strategy, you must read the relevant product disclosure statement or disclosure document. Your investments may not keep pace with inflation so that, over time, your money has less purchasing power. Your capital and/or the interest earned on that capital may not be paid due to the default of the underlying bank or deposit-taking institution. 10

24 5 Investment options The Fund aims to provide members with access to a range of investment options. It s up to you to determine with your adviser an appropriate investment strategy that addresses your personal needs and long-term goals, and to implement that strategy by choosing your investments from the range of available investment options within the Fund. The investment options available through the Fund include: non-unitised portfolios exposure to Australian equities portfolios designed by investment managers portfolio blends an asset allocation approach which spreads your investment over various asset classes and investment options to provide for your investment strategy and determined tolerance to risk exchange traded funds (ETFs) Australian direct interest rate securities Australian direct shares approved securities in the S&P/ASX All Ordinaries Index managed funds (see the following table for examples). Type of managed fund Description Examples Multi-sector funds These managed funds use an asset allocation approach, spreading investment over various asset classes to provide for your investment objectives and your determined tolerance to risk. Conservative Moderately conservative Balanced Growth High growth Single-sector funds These managed funds invest in a particular asset class. This allows you to use these funds to build a portfolio to match your investment objectives and your tolerance to risk. Cash, fixed interest Property and infrastructure Australian equities International equities, alternatives The Fund offers a diverse choice of non-unitised portfolios/portfolio blends and fund managers. This PDS and Investment Guide set out some basic principles of investing. You should discuss these with your adviser. The Trustee may add or remove investment options from the investment menu from time to time. The Trustee makes these decisions based on recommendations from the asset consultant and HUB24. 11

25 Discussing your options with your adviser It s important for you to discuss your tolerance to risk and your investment objectives with your adviser, along with the timeframe you have to construct an investment strategy. Your adviser can then help you to build an investment strategy that suits your individual circumstances so you can achieve the right balance between risk and return, taking into account factors such as your investment goals, investment timeframe and how comfortable you are with volatility. Your adviser will help you make an informed decision, as each investment option carries a different level of risk. When choosing how to invest, you should consider the likely investment return and your investment timeframe. If you don t make an investment choice, any contributions you make will be held in the default investment option, which is the cash account. Changing your choices You can change your investment strategy or options at any time through your adviser. You must make sure that your cash account will have enough money in it (including the minimum balance of 1.25% of the account balance) to make the transaction possible. Your adviser bears full responsibility for placing your instructions on your behalf and ensuring your investment strategies are implemented. Instructions will be acted on and effected as soon as practicable, provided the instructions were received from you through your adviser. HUB24 will have no obligation to act in accordance with the instructions if HUB24 reasonably considers the instructions to be ambiguous, unclear or in conflict with any applicable law, regulations or local market practice, or not directed by you, in which case we will notify your adviser accordingly. Diversifying your investments The Trustee has set diversification limits on how much you can invest in some of the underlying investment options. When you and your adviser are setting your investment strategy, or your adviser sends through some instructions for your account, the system will tell you immediately if you re outside these limits. For information on the diversification limits applicable to your account, see the Investment Guide. Table of investment options The investment options available in the Fund fall into six categories as shown in following table. For more details about the investment choices available from time to time, refer to the Investment Guide and the relevant product disclosure statements or disclosure documents available on the HUB24 workbench and our website at 12

26 Non-unitised portfolios Portfolio blends A non-unitised portfolio is a pre-set investment portfolio that is designed by a professional investment manager to meet a certain investment objective using one asset class only Australian securities. The Fund offers a range of portfolio managers who have designed each non-unitised portfolio according to their particular investment styles and objectives. Each non-unitised portfolio has allocated specified weightings to securities and the managers are responsible for the non-unitised portfolio. As the value of the securities increases or decreases, the weightings change. The manager may also make changes to the securities weightings within the non-unitised portfolio from time to time. HUB24 implements these changes to the portfolio composition. If you invest in a non-unitised portfolio, your investments may require rebalancing from time to time to correspond with the securities weightings of the rebalanced non-unitised portfolio. If you d like to opt out of the non-unitised portfolio, you need to speak to your adviser. A disclosure document for each non-unitised portfolio is available on our website. The Non-Unitised Portfolio/ Portfolio Blend Disclosure Document outlines the investment strategy, philosophy and objective of the professional manager who is responsible for the composition of the non-unitised portfolio. A non-unitised portfolio can be actively-managed or indexed: Actively-managed you re buying into a portfolio management strategy where the manager makes specific investments with the goal of outperforming a benchmark. Indexed you re buying a portfolio of securities that closely tracks an index (cash holdings may also be required). HUB24 receives a quantitative data feed from Standard and Poor s for the various indices. HUB24 then screens out any securities with relatively low weights to minimise small, non-efficient trades. HUB24 may also include cash holdings to enable certain corporate actions (e.g. the exercise of rights entitlements), so the performance of a non-unitised portfolio may differ slightly from the actual index it tracks. A portfolio blend is a pre-set investment strategy based on how comfortable you are with investment risk. It can be made up of all asset classes and investment options from the approved list of investments of the Fund. The manager can use both strategic asset allocation and tactical asset allocation to achieve the investment objective for the blend. Portfolio blends are a way to access a multi-manager and asset class investment strategy. A portfolio blend can be composed by a dealer group or an individual adviser. The Fund enables your adviser to rebalance these portfolio blends easily through management tools on the workbench. The rebalance and reallocation of the portfolio blends may occur regularly and you may receive trade notifications from your adviser. Exchange traded funds (ETFs) Australian shares Term deposits Managed funds Exchange Traded Funds (ETFs) are investment funds, traded on an exchange, that invest in a basket of securities or other assets and that generally seek to track the performance of a specified index or benchmark (such as the S&P/ASX 200 Index). They are typically registered managed investment schemes and investors hold units in a unit trust rather than shares in a company that operates the investment fund. Each ETF security (or unit) represents an interest in a portfolio of securities, currencies or commodities. In consultation with your adviser, you can invest in a selection of direct share securities. The Fund provides a broad selection of direct share securities predominantly from the S&P/ASX All Ordinaries Index. The Fund offers you the opportunity to invest in term deposit accounts with a range of durations, typically three months, six months or one year. The Fund may offer other term deposits with differing durations and features as determined by the Trustee. To ensure your application is processed for the current terms offered, HUB24 must receive it by 10.00am on Fridays (i.e. a business day). The current terms offered are uploaded to the workbench and website each week (usually on a Monday). The Fund offers a large range of wholesale managed funds, enabling you to diversify across the asset classes in your investment strategy. Wholesale fund fees charged are generally lower than retail funds, and some managed funds pass rebates back to the Fund. HUB24 generally returns these rebates in full to existing members. 13