FINANCIAL SERVICES GUIDE
The Financial Services covered by this Financial Services Guide (FSG) are provided by
North Coast Insurance Brokers Pty Ltd
T/as Austbrokers NCFS
Corner Bruxner Highway and Cook Street
SOUTH LISMORE NSW 2480
Telephone: 02 6620 2000
Fax: 02 6620 2022
Our ABN number is 67 003 005 927 and our Australian Financial Service License No. is 240562.
This guide is designed to assist you in deciding whether to use the financial services offered by us. It contains important information about:
• the services we offer you
• how we and our associates are paid
• how we manage conflicts of interests
• our internal and external dispute resolution procedures and how you can access them
It is an important document. Please read it carefully and keep it in a safe place.
If you are a retail client and we agree to give you personal advice we will provide you with a Statement of Advice (where required by law) or a record of our advice. Any Statement of Advice or Record of Advice we provide will set out our advice, the basis of our advice, and information on any remuneration, associations or other interests, which might reasonably have influenced us in giving our advice.
If you are a retail client and we arrange an insurance policy for you, or if we recommend you buy a particular insurance policy, we will give you a Product Disclosure Statement when required. It is prepared by the insurer and is designed to give you important information on the features, benefits and risks of the policy to assist you in making an informed decision about whether to buy the product or not. It may be more than one document.
|A guide to our relationship with you and others|
What services can we provide?
Our various roles
We are an Australian Financial Services Licensee and are licensed under the Corporations Act to advise and deal in relation to all general insurance products.
We can act in a number of roles in providing our services.
We usually act on your behalf. However in some cases, we may act on behalf of an insurer or their representative or on our own behalf (e.g. as a referrer to another service provider). We tell you if this is the case as this means we do not act for you when we provide the service.
Arranging insurance for you
This is where we arrange for the issue, variation, renewal or cancellation of an insurance policy for you. The process differs depending on the type of insurance and we explain it to you when you apply for the insurance.
Providing advice to you
There are two types of advice service we provide and it is important to understand the difference:
In some cases where we arrange more than one policy for you we may provide personal advice for one policy and general for another. We tell you when this is the case.
We can also assist you when you need to make a claim. If a claim occurs contact us and we can help you decide what to do. We do not do anything without your consent. We provide this assistance as part of our overall service for no separate charge unless we tell you otherwise. We don’t provide this service if we no longer act for you.
Any claims documentation, insurance company settlement cheques and other information received by us on your behalf will be provided to you as soon as reasonable practicable.
Acting for insurers
In some circumstances we may have an agreement with an insurer or their representative to arrange insurance policies on their behalf and not on your behalf. This means that we act for and in the interest of the insurer as our principal in providing the services, not yours.
We will tell you when we act for the Insurer and not for you.
In some cases insurers require the full premium payment up front. Premium funding is one way of not having to pay your premium in one lump sum. You will, however, have to pay interest to the premium funder on the amount borrowed.
We and Austbrokers Holdings Limited (ABN 60 000 000 715), have a preferred supplier arrangement with Pacific Premium Funding Pty limited (“Pacific”) for the arrangement of premium funding. In arranging premium funding with Pacific, or any other premium funder, we do not provide personal advice or represent that any of the funder’s products and services are right for you or that they are the most appropriate. You need to make your own decision based on the information provided.
We may provide a variety of services and act in different roles.
It is important to note that given the wide variety of general insurance products available and the need to remain competitive we may provide a variety of the above services to you and act in a variety of roles.
For example, where you require a number of different covers we may provide personal advice for some products you need and act on your behalf in relation to them. For others we may only provide you with general advice and for others only act as agent of the insurer not you. We can provide a further explanation of why this is the case and we make sure we tell you what the service is and our role before or at the time we provide the service.
Ask us if you need more detailed information or do not understand our explanation.
How can you give us instructions?
You need to give us instructions in writing by letter or fax or by another method agreed by us. We will tell you what is possible when you contact us.
What information do we maintain about you and how can you access it?
We maintain a record of your personal profile. That record contains information about insurance policies that we have arranged for you. The record may also contain details of your objectives, financial situation and needs collected for the purpose of giving you personal advice. We also maintain records of any recommendations made to you.
If you would prefer to have a copy mailed to you please ask us.
If you wish to access your file, please ask us.
How are we remunerated for our services?
When we act for you in advising on and/or arranging insurance.
When we act on your behalf in advising on or arranging insurance we can be remunerated in a number of ways. They can vary according to the service you require and/or our arrangements with the relevant insurer or their representative.
We are remunerated by:
Details are provided below on each.
Commission paid by the insurer to us
Unless we tell you in writing that we will provide our service on a “Fee Only – No Commission” basis, we are remunerated by commission from the relevant insurer whenever you enter into an insurance policy arranged by us (including renewal and some variations which increase the premium payable).
The commission is a percentage of the insurer’s base premium (i.e. premium excluding stamp duty, fire services levy, GST or any other government charges, taxes, fees or levies). The rate ranges between 0% and 25% excluding GST. Different insurers can agree to pay us different commission rates for the same type of products. The rates also vary for each product type. In some cases the rate may be higher because of the role we play in performing certain distribution functions the insurer would otherwise have to perform.
The commission rate does not represent our profit margin as it also reimburses us for administrative and other expenses we incur in providing our services.
The commission is included in the premium amount set out in your invoice and we receive it when you pay the premium or at a later time agreed with the insurer.
If there is a refund of premium as a result of the cancellation or adjustment of your policy we reserve the right to retain our remuneration earned prior to the cancellation or adjustment (even where you exercise a cooling off right). If we didn’t do this we would not be properly paid for the services provided by us to you.
Other remuneration arrangements we have with insurers
Austbrokers NCFS QBE LPS Profit Share Clause
We have a profit share arrangement with QBE Insurance (Australia) Limited (ABN 78 003 191 035) in relation to all the insurance that we place through that part of their business known as QBE Commercial.
We can receive a 15% share in the net profit determined by QBE for the relevant products (“Products”) for each prior two year period calculated as at 31 December each year, provided we meet certain criteria. These benefits are generally payable on or before 31 March each year. However, the profit can never be more that 3% of the total premium of all policies arrange by us in that period. We call this the “Profit”.
We can also receive a client bonus depending on the percentage of our clients who hold business insurance and home and contents insurance. If the client percentage is 30%-44%, the client bonus amount is 2.5% of the Profit. If it is above 45%, it is 5% of the Profit.
We may also receive a renewal bonus of 5% of the Profit if at least 85% of our clients who are holding the Products, renew with QBE.
All of the above amounts that we can receive are exclusive of GST.
E.g. if the Profit is $50,000 and we meet the maximum criteria for all of the above, we receive a profit share of $7,500 plus $750 GST; a client bonus of $2,500 plus $250 GST; and a renewal bonus of $2,500 plus $250 GST. It is possible that we may not meet some or all of the above criteria in which case we would not receive the profit share of one or more of the bonuses that apply.
We are also a member of the Austbrokers Group of insurance brokers.
Austbrokers Holdings Limited (ABN 60 000 000 715) (AHL) and IBNA Limited (ABN 43 086 563 055) (IBNA) are joint owners of A & I Member Services (AIMS) a company that provides marketing, distribution and training services to members of Austbrokers and IBNA Group. Some insurers pay a commission to AIMS on selected products arranged by Austbrokers member insurance brokers and IBNA members which is an agreed percentage of the base premium (Before government fees or charges). Different insurers may pay different commission rates to AIMS.
This money funds the provision of AIMS services to Austbrokers and IBNA members. We, other Austbrokers members and IBNA members benefit from this support and it helps ensure we can continue to provide you with our extensive range of services. Austbrokers and IBNA members may also be entitled to share in any excess of the commission received by AIMS in any one annual period (if any) after deduction of all relevant AIMS costs and expenses in providing its services in that period
See below for soft dollar benefits we may receive from insurers and our policy on this.
Fees Paid by You
We may also charge you a Broker Fee in addition to commission when you enter into an insurance policy.
We may charge you:
You will be informed of the nature and amount of any fee involved prior to us performing the service for you.
In some cases we may specifically agree in writing before providing certain services to charge for these services on a “Fee Only – no commission” basis. The fee will either be a pre agreed set amount for specific services, an amount based on a pre agreed rate for the time we spend providing the service, or on some other basis agreed with you before we provide the service. It is payable after we have provided the service or at such earlier time we agree with you in writing.
Any fees that we charge you will be noted in our invoice and are non refundable (even when you exercise a cooling off right).
Where we act for the insurer
Where we act for an insurer, not you, we receive commission from the insurer as our principal and may also charge you an administration fee. It is payable when you buy the policy or at such earlier time we agree with you in writing. The fee is noted in the invoice we send you, is exclusive of GST and is not refundable.
Where there is a referral
Where a third party has referred you to us, we may pay them an amount which can range from 0% to 40% of the commission that we receive on the net premium or pay them an agreed referral fee. The amount of the commission or the fee will vary depending on both the referrer and the insurance product you purchase. A commission or an agreed fee may also be paid on renewal and in some cases on variation.
If we refer you to another service provider (eg Premium Funding etc), we will be remunerated by them for doing this unless we tell you we aren’t. In the case of Premium Funding, the amount ranges between 0% and 5% and will vary depending on both our role and the business concerned. Other referral remuneration will be
disclosed at the time of referral.
In making any referral we do not advise or represent that their products and services are right for you and take no responsibility for the products and services they may provide to you. You need to make your own decision based on the information they provide.
Our staff’s remuneration
Our staff receive an annual salary that may include bonuses based on performance criteria (including sales performance) and achievement of company goals. They may also receive certain soft dollar benefits described further below.
Receipt of Soft dollar benefits policy
From time to time we and our representatives may also receive what are commonly referred to as “soft dollar benefits” from product issuers and other financial service providers we deal with.
These can include entertainment (e.g. lunches, sporting events, movies etc), conferences (e.g. attendance at a product issuer conference or sponsorship of our Austbroker Group Annual conference by a product issuer), accommodation and travel, business tools (e.g. software), gifts (e.g. product issuer or service provider branded promotional and other occasional small gifts such as bottles of wine or hampers on special occasions etc).
These benefits are provided by a wide range of product issuers and service providers. In most cases they relate to our development of an understanding of the product issuer and service provider and their product ranges and practices etc. Ultimately, this assists us in better servicing and representing you.
Our policy is that any of the above received by us or our representatives that exceed $300 per item or transaction in estimated value are potentially material.
This means they must be disclosed to our Conflicts Manager in writing. The Manager determines if appropriate procedures are in place to manage or avoid any potential conflict of interest which might arise. They only approve benefits where this is the case and retain a record of this which you can access on request.
Any soft dollar benefits which are principally given because of the volume of business provided by the recipient to the product issuer or service provider giving the benefit are not permitted.
The above restriction does not apply to conferences or functions, the principal purpose of which is professional development and where the right to attend is not based on volume.
We receive (a) a commission which is a percentage of the amount of funding provided to you; (b) a payment based on a percentage of all loans arranged each month; (c) a payment based on a percentage of certain fees and interest received by Pacific on the total amount of outstanding loans less certain expenses; and (d) a proportion of certain upfront payments received by Austbrokers Holdings Limited from Pacific based on the value of the loans arranged with Pacific in an agreed period when compared with those arranged by other Austbrokers members. We are owned partly by Austbrokers Holdings Limited and benefit from any profit made by this entity due to this arrangement.
If you need more information or explanation of the above, please ask us.
Further information about remuneration received by us or others
If we provide your with personal or general advice as a retail client we will tell you either:
Money Handling Arrangements
We handle all money received from you or the insurer in relation to insurance in accordance with the requirements set out by the Corporations Act 2001 (Cth). We keep any interest earned on any amounts held by us on your behalf or on behalf of the insurer. The length of time we hold any money can vary according to the type of insurance and the different arrangements we have in place with insurers.
|Do we have any relationships or associations with issuers or related bodies corporate that might influence our service or advice?||We are a member of the Austbrokers group of insurance brokers.
In some cases we may refer you to or advise you to use the services of one or our related body corporate. They may act as agent of the insurer and you will be told when this is the case. As a member of the same corporate group we may indirectly benefit from any such referral or advice if it improves the group performance.
Please refer to our remuneration section for the normal benefits we can receive under such arrangements.
How do we manage Conflict of Interest?
We take any potential conflicts of interest seriously and have a Conflict of Interest Policy which we and our representatives must comply with and you can access by contacting us. Compliance is audited on a regular basis.
Conflicts of interest are circumstances where some or all of your interests as our client, are or may be inconsistent with, or diverge from, some or all of our interests.
Our procedures and training are all designed to properly manage any conflict of interest and it is important to note that we have legal duties we owe you when we act as your professional adviser. We treat these very seriously.
A key conflict faced when we act on your behalf is where we receive benefits from someone other than you – this can potentially influence us to act in their or our interests rather than yours. Where we arrange a policy an insurer can pay us commission (see above for details). It is the major form of insurance broker remuneration and can create a potential conflict of interest because it may be in our interest to recommend the product issuer or service provider that pays us the most because it increases our remuneration. This may not be in your interest in certain circumstances.
We have a number of procedures in place to manage this potential conflict of interest. For example, we tell you about this remuneration arrangement in this Guide and you can ask for more detailed information if you need it before you proceed. Where we provide personal advice we have a legal duty as a professional to put
your interests ahead of our own and can only provide you with advice that is appropriate for you. If we can’t provide such advice we will tell you. The Statement of Advice and/or Statement of Additional Advice we give you containing the personal advice also confirms the remuneration received. We and our representatives are trained in this important duty and compliance with it is monitored regularly.
If you have any questions make sure you ask us.
Cooling off Period
A cooling off period may apply to an insurance policy issued to you as a retail client. During the period you may return the policy and the insurer will refund the premium less any legally permitted deductions. Details of your cooling off rights are included in the relevant Product Disclosure Statement document. Ask us if you do not understand the right.
Other terms of our Service
Other terms of our Service (cont.)
Information About Insurance Contracts
You must read the Information About Insurance Contracts (located on the back of your invoice/alterations correspondence). Please tell us if you have not received it. If you have any questions or do not understand anything we have set out in that document, please ask us. It will help you understand some important matters about your insurance.
Misstatement of Premium
We try to tell you the correct amounts of premium and statutory and other charges that apply to your insurance. In the event that we misstate that amount (either because we have made an unintentional error or because a third party has misstated the amount), we reserve the right to correct the amount. Where permitted by law, you shall not hold us responsible for any loss that you may suffer as a result of any such misstatement.
Professional Indemnity Insurance Arrangements
We and our representatives are covered under professional indemnity insurance that complies with the requirements of section 912B of the Corporations Act.
The insurance (subject to its terms and conditions) will continue to cover claims in relation to our representatives/employees who no longer work for us (but who did at the time of the relevant conduct).
What should I do if I have a complaint?
If you have any complaints about the service provided to you, you should take the following steps.
If you have any further questions about this financial services guide, please contact us on phone number (02) 6620 2000.
Retain this document for your reference and any future dealings with North Coast Insurance Brokers Pty Ltd