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Phoenix’s service is structured such that clients could select a Separately Managed Accounts (SMAs) from a range of Phoenix – developed Model Portfolios in accordance with their financial goals and/or advice that has been provided by a financial planner.

The SMAs would be for both superannuation and investment purposes.

The service includes all invesment management and administration that would ordinarily apply to listed security portfolio investing. With each client’s portfolio/s being separately-managed by Phoenix, the outsourced administration service centralises the timely recording of portfolio transactions, dividends, trust distributions and interest receipts. Accordingly each client’s portfolio/s is/are kept up-to-date on a continuous basis.

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Separately Managed Accounts (SMAs)

Phoenix specialises in the development of Model Portfolios and provides clients with the opportunity to replicate these Portfolios through SMAs. The latter are managed by Phoenix on a discretionary basis and facilitates the client holding the securities in the SMAs in either their own name or in the name of a nominated entity. SMAs also offer clients the ability to benefit from not having to pay embedded capital gains tax that would apply when transacting in units of pooled managed funds.

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Direct Security Ownership and Transparency

Direct security ownership enables a client to determine the tax liability associated with the sale of a security held within SMAs and transparency at the individual security level makes the timing and the amount of dividend payment evident. Both features serve to provide clients with more precise cash flow forecasting.

Another advantage that SMAs have over pooled managed funds is that the transparent structure of the investment vehicle ensures that the individual securities included in the SMAs and their specific performances can be easily monitored.

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Tax Benefits

Tax efficiency is one of the major benefits of SMAs and it provides investors with more control over the management of their Capital Gains Tax (CGT) and franking credits.

As all securities held in SMAs are purchased and registered in the client’s name (or in the name of an entity nominated by a client) there would be no need to sell the securities (and thus trigger a CGT event), should the SMAs be transferred to another investment manager.

In addition, the embedded capital gain in a unit’s price in a pooled managed investment scheme is avoided as all securities included in the SMAs are purchased individually on the Australian Securities Exchange and at the prevailing market price.

With the client having beneficial ownership of all securities held in SMAs, a further benefit is that dividends and franking credits flow directly to the client.

Any realised capital gains/losses in SMAs are specific to each client and are available during a financial year to be offset not only against any losses/gains in the client’s portfolio/s but any losses/gains they may have in other investments, for example an investment property.

SMAs are also conducive to tax planning. For example, access to dividends that include franking credits can be managed at an individual security level to reduce income tax or CGT can be minimised by selling individual security parcels that have been held for longer than 12 months.

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Reporting

The following are sent to Phoenix’s SMA clients:

–         On-going: A copy of a contract note when portfolio transactions are completed;

–         Monthly: A summary of the major events that impacted financial markets during the previous month;

–         Monthly: A performance summary of a client’s portfolio; a summary of transactions during the month; and the composition of the portfolio; and

–         Annually: A summary for tax purposes of the previous financial year’s portfolio activity including details of capital gains/losses; income received; and costs incurred.

Reports are sent by email unless hardcopies are specifically requested.

However, clients are able to obtain their updated security holdings and portfolio valuations continuously by using a username and password provided by Phoenix that permits access to their portfolio/s through the Phoenix website.

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Documents

Phoenix will provide new clients with the following documents for execution: an Investment Management Agreement; a Cash Management Trust application form; and a Broker Sponsorship Agreement.

Praemium Limited’s administration platform links the client’s bank and broker accounts to the client’s portfolio/s to facilitate recording and reporting on a separately-managed account basis.

Clients will also be required to complete documents issued by Phoenix in accordance with its compliance program under the Anti-Money Laundering and Counter Terrorism Financing Act 2006.