FINANCIAL SERVICES GUIDE What you need to know about KNM and our Financial Services Contents The purpose of this Guide Who is KNM? Who is your adviser? What products can my adviser provide advice on? How does my adviser provide advice? How can you provide instructions or information? How will I pay for the services provided? What arrangements do KNM have in place with product providers? Do KNM have any relationships or associations with product issuers which might reasonably influence theme? How does you adviser deal with your personal information? What to do if you have concerns about your advisers services? KNM Privacy Statement Issue Date: 10 June 2013 Version: 10062013
The purpose of this guide is to introduce you to KNM Services Pty Limited (KNM) and your adviser and to offer you information about the financial services provided under KNM s financial services licence. It aims to assist you in deciding whether to use any of the services offered. This guide contains important information about:- Who KNM is Who your adviser is How KNM and your adviser can be contacted What services we offer you How we are paid for these services; and What you can do if you have any concerns. This guide is only complete when the adviser s profile (part 2) is attached. KNM has authorised the distribution of this guide. Who is KNM? KNM is an Australian Financial Services Licensee (AFSL) licenced by the Australian Investment & Securities Commission (ASIC). Our Financial Services Licence Number is 223477. KNM has offices in Cairns, Ingham, Mackay, Kingaroy, Brisbane and the Gold Coast. These are all staffed locations. We have authorised representatives in Cairns, Townsville, Ayr, Mackay, Rockhampton, Brisbane, Gold Coast, Sydney and Melbourne. KNM and its advisers are committed to providing specialist advice on life insurance, superannuation and investments to the people of regional and rural Australia. We deal with the professional and small business community and a wide range of other clients who need the security of life insurance, income protection and advice on their superannuation and investments. Who is my adviser? Your adviser is authorised by KNM to provide you with financial advice on KNM s behalf. Your adviser s profile is attached to this Guide and forms part of this Guide. The profile will provide more detail of their individual qualifications and experience, the services they offer and the remuneration they receive. If the adviser profile is not attached please ask the adviser for this profile or contact KNM s head office. which covers us and our advisers for errors or mistakes relating to our services. This insurance provides cover for claims made against us and our representatives/employees including claims in relation to representatives/employees who no longer work for us but who did so at the time of the relevant conduct. What can my adviser provide advice on? As an Australian Financial Services Licence holder, KNM s advisers are authorised to provide advice on and deal in the following classes of financial products:- life products including:- - investment life insurance products - life risk insurance products superannuation general insurance products interests in managed investment schemes including investor directed portfolio services deposit and payment products limited to:- - basic deposit products - deposit products other than basic deposit products debentures, stocks or bonds issued or proposed to be issued by a government interests in managed investment schemes including - investor directed portfolio services retirement savings accounts ("RSA") products securities standard margin lending facility Your adviser may only be able to provide advice in some of the above areas. The adviser s profile will set out the areas in which they can provide advice. Advisers authorised under KNM s licence can recommend risk insurance, superannuation and investment products on KNM s approved product list (APL). The products on this list are analysed and reviewed regularly. In addition to providing product advice, your adviser can also provide certain services. For example:- Product implementation Review service Claim facilitation KNM is responsible for the advice and conduct of your adviser. We are not responsible for any unauthorised services they may offer (to the full extent permitted by law), so please check the services your adviser offers in their adviser profile. KNM maintains adequate professional indemnity insurance, as required by the Corporations Act, Page 2
How does my adviser provide advice? To ensure we understand your financial needs and recommend the most appropriate solutions, your adviser will:- Provide you with this FSG and agree on a basis for providing services to you. Obtain the relevant information about your financial needs and objectives and your current financial affairs so that they can provide the most appropriate advice. Research the solutions that will best help you satisfy those needs and objectives. Provide you with a written Statement of Advice (SOA) which sets out their recommendations and the basis for them, the key issues involved and our remuneration for providing our professional advice to you. You may request a copy of the SoA or RoA at any time up to 7 years from the date your adviser gave the advice to you. How can you provide instructions or information? You can give your adviser instructions verbally or in writing. In some cases, instructions will be required in writing. How will I pay for the services provided? KNM and your adviser are remunerated for the services you receive by the following methods:- Receipt of initial and ongoing commissions from product providers; Fee for service which means any of the following: a fee for providing a Statement of Advice, a management fee, an ongoing advice or services fee, or any fee that you will pay for the service; or A combination of both Personal Risk Insurance Unless we advise you otherwise, we are remunerated by commission from the relevant insurer when you enter into an insurance policy arranged by your adviser. The amount of commissions paid by product issuers varies from company to company. Discuss the SOA with you and vary the recommendations if necessary. Provide you with a Product Disclosure Statement (PDS) for each product recommended in the SOA. The PDS is prepared by the product issuer and contains information about the product. Implement the agreed recommendations. Review your financial situation as agreed. If you are an existing client, you may have been through this process. If you receive further advice from us you will receive either a Record of Advice (RoA) or SoA. You will receive a SoA if the advice is in relation to a different type of product or your circumstances have changed. The commission is paid by the product provider and is not an additional charge to you. Investment & Superannuation Advice For investment advice, you pay for advice in one or a combination of these four ways: upfront and, ongoing commission, adviser service fee, or fee for service. 1. Upfront We may be paid a commission upfront by the company issuing the product. This is taken from the amount you invest. 2. Ongoing We may be paid an ongoing commission by the company issuing the product. This may be included in the cost of the product you invest. 3. Adviser service fee We may be paid a fee by the company issuing the product. This is usually taken directly from the amount you invest. 4. Fee for service You agree upfront with your adviser to pay for the services you receive either on an hourly rate, a set fee per year, a percentage of funds invested, or a combination of these. All remuneration, including the bonuses detailed above, will be disclosed in detail in the Statement of Advice that is given to you prior to proceeding with your business. Page 3
Other remuneration information Where a third party has referred you to us, they may be paid a referral fee of up to 30% of the commission or fees received by KNM. The adviser profile will contain further information in relation to your advisers remuneration. How are fees, commissions or other benefits calculated for providing financial services? KNM s advisers are permitted to set their own fees and the amount of commission they will receive from product issuers. The fees charged and commissions received by your adviser are contained in Part 2 of this FSG. All fees and commissions generated by your adviser are paid to KNM. Any cheques you write to pay fees should be payable to KNM and not your adviser. KNM will then pass an agreed percentage of those fees and commissions onto the adviser. IOOF pays KNM 0.05% on all funds under management in the Spectrum Super product. KNM may receive an annual bonus from Macquarie on business that KNM completes that is in excess of $250,000 net new premium per year. If KNM was to qualify, the bonus rate applicable on such business would be in the range of between 5% and 9% of new business premium placed with Macquarie. Product providers may also provide other benefits to KNM and KNM advisers, including but not limited to:- Entertainment such as lunches or sporting events etc. Sponsorship of KNM professional development events. These benefits are outlined in KNM s soft dollar register. Do KNM have any relationships or associations with product issuers which might reasonably influence us? KNM is owned by a number of shareholders. TAL (formally known as TOWER Australia Limited) is one such minority shareholder. TAL is a product issuer with whom KNM deals. What arrangements does KNM have in place with product providers? KNM may receive bonuses from product issuers. At the date of this FSG, TAL pays KNM a bonus based on the increase in the value of the premiums paid to TAL which is attributable to KNM s recommendations and arrangements. Based on current projections KNM expects the maximum bonus payable to be less than 15% of the growth in the premiums from year to year. In addition, KNM receives 1% of the total in-force premium. AIA pays KNM an additional 5% commission on all new business premium submitted and an additional 2% commission on renewal premiums. AMP may pay an annual bonus of between 0.7% and 3% on the total of the annual in force premiums for the average of the relevant 12 month period. AMP may also pay a biannual bonus of between 0.015% and 0.15% on the total of the funds invested at the date of calculation Page 4
How does my adviser deal with my personal information? We maintain a record of your personal profile, which includes details of your objectives, financial situation, needs and any recommendation we made to you. We are committed to implementing and promoting a privacy policy, which will ensure the privacy and security of your personal information. A copy of our privacy document is enclosed for your information. If you wish to examine your file, we ask that you make a request in writing and allow up to fourteen days for the information to be forwarded. Every effort will be made to comply with your request. We reserve the right to charge a fee to cover the cost of verifying the application and locating, retrieving, reviewing and copying any material requested. If the information sought is extensive, we will advise of the likely cost in advance and can help to refine your request if required. What do I do if I have concerns about my adviser s services? Firstly please speak to your adviser to discuss your concerns. If your adviser has not been able to resolve your concerns satisfactorily, or you do not wish to speak to your adviser, please contact: The Managing Director KNM Services Pty Limited Level 1, Suite 7 463 Nudgee Road Hendra Qld 4011 KNM will always seek to resolve your concerns quickly and efficiently If KNM have not been able to resolve your concerns satisfactorily you may lodge a complaint with:- Financial Ombudsman Services (FOS) PO Box 579 Collins Street West, Melbourne, Vic 8007. Tel 1300 780 808 Fax 03 9621 2291 FOS is an industry sponsored company that seeks to advise and assist clients to resolve complaints with their financial advisers. FOS is an independent and impartial company. The Australian Securities and Investments Commission also has a free call info line on 1300 300 630. You can contact the Managing Director at KNM s Brisbane address (above) or on telephone number 07 3620 6200 if you have any further questions. Please retain this document for your future reference. Page 5
Privacy Statement At KNM Services Pty Limited (KNM) your right to privacy has always been important to us. This document explains why your adviser collects your personal information and how it may be used or disclosed. We collect information about you to provide you with various insurance/superannuation products and services to you. We usually collect personal information such as name, age, contact details, payment details, occupation, family and medical history and employment information. The full details of the types of personal information we collect can be found in the questions we ask and/or in the forms we ask you to complete. In some situations we may collect your personal information from a third party such as your medical practitioner or health professional, accountant, employer or superannuation provider. We will only do so with your consent. If you do not provide information sought by your adviser from time to time, it may affect your adviser s ability to provide you with various products or services. You are required by law to disclose all relevant information to us when you apply for a financial product. Please refer to your application form for further details of this duty and the consequences of not complying with this duty. Your personal information is used to manage and administer all products and services we provide to you, i.e. provide you with information about other products or services that may be of benefit to you, and to ensure our internal business operations are running smoothly (which may include fulfilling regulatory and legal requirements and confidential system testing). Depending on the type of product or service we provide to you, we may need to disclose your information to certain third parties. If we do this we require these parties to protect your information in the same way we do. The types of organisations we may need to disclose your personal information include:- External service providers that provide financial, legal, administrative or other services in connection with the operation of our business (for example our auditors, compliance consultants etc); Government agencies (as part of our regulatory or statutory obligations); Where we collect your information from a third party, then we may disclose your personal information to that person or entity; Where you were referred by a third party (e.g. accountant) then we may disclose your personal information to that party; Insurance, superannuation or funds management product issuers with your consent Other organizations that may wish to offer you their service. Your health and medical information will only be disclosed to service providers or authorised personnel who are directly involved in the assessment or administration of your application. Your personal information will not be used or disclosed for any purpose without your consent, except where required by law. By completing a fact find/application form or any other form, you consent to KNM and your adviser collecting, using, disclosing and handling your personal information as set out in this document. You can request access to the personal information we hold about you. You may ask us at any time to correct this information where you believe it is incorrect or out of date. There will be no fee for requesting access to your information. However, we may charge you the reasonable cost of processing your request. To access your personal information, or to obtain more information about your rights or our Privacy Policy, please contact KNM s Privacy Officer at:- Level 1, Suite 7 463 Nudgee Road Hendra Qld 4011 Email: brisbane@knmservices.com.au Tel 07 3620 6200 Fax 07 3630 2930 KNM Services Pty Limited ABN 62 094 109 958 Australian Financial Services Licence No. 223477 Head Office Level 1, Suite 7 463 Nudgee Road Hendra Qld 4011 Tel: 07 3620 6200 Fax: 07 3630 2930 Email: brisbane@knmservices.com.au Website: www.knmservices.com.au Page 6