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What is the main difference between a Managed Account and a Managed Fund?

A Managed Account is a portfolio of stocks managed by an investment professional that is entirely owned by an individual investor, unlike a managed fund which pools the assets of different investors.

How easy is it to set up a Managed Account?

It’s very straightforward. Just read the product disclosure statement and fill in the online application form or call us on 1300 88 11 77. As your nominated representative, Fat Prophets will oversee your application and provide any assistance you require.

Who makes the investment decisions?

The Fat Prophets Investment Team, headed by Angus Geddes, constantly monitors the model portfolios making changes as they are necessary. The team will utilise research produced by the Fat Prophets Analyst Team as well as external research and conducting internal research and due diligence.

Can I change my model portfolios?

Yes, any time you wish. You can move from one model to another or change the mix between all available models.

Can I make additional investments into my Managed Account?

Yes, either as one-off payments or by setting up regular contributions via direct debit.

Can I make withdrawals?

Yes, at any time and without penalty.

How can I track the performance of my portfolio?

You will be able to view online all the relevant details such as your current holdings, transactions, tax positions, brokerage etc. on a 24/7 basis. At financial year-end you will be able to access an annual report and summary of all these items presented in user-friendly formats. The consolidated tax reports are usually released a few months after the end of financial year.

How are fees and expenses paid?

When your account is set up, we will also open a cash management trust, which will earn the standard overnight rate. A 3% cash holding will be maintained in the CMT and used to cover fees that come due.

What is a ‘model portfolio’?

Portfolio models allow Fat Prophets to manage a large number of investors’ portfolios in line with a model, or ‘master’ portfolio. Any change we make within a model is automatically reflected in the portfolios of all clients within that model. For example, if the Fat Prophets investment team decides that the Concentrated Australian Shares Model should take profits on stock XYZ, they might decide to reduce the weighting by 2%. A 2% sell-down will then take place for all clients in that model, regardless of the size of their portfolio. There are two key benefits to the model portfolio structure, the first is wholesale brokerage, the second is a focused approach to portfolio management (we don’t need to manage hundreds of tailored portfolios).

Is the Australian Shares Income portfolio model the same as the 'Income Report' I can see in the Members Area?

No, the ‘Income Report’ is a hypothetical portfolio containing a selection of income stocks from our ‘Australiasian Equities’ recommendations. The managed accounts are independant of the recommendations, however the Investment Team does rely heavily on the research reports. The team also conducts its own research and utilises a broad range of external research.

Where can I see historical performance?

To receive information about the past returns of our portfolio models, please contact our team on 1300 881 177 or email us at wealth@fatprophets.com.au

Are the shares held in my name?

This is a common misconception. Investors have beneficial ownership through a custodial agreement. In other words, the custodian holds the shares on behalf of the investor. Therefore the shares are actually held in the name of the custodian, under their HIN. Investors retain most rights of direct ownership, such as franking credits. However, company correspondence and information about corporate actions will be sent to the custodian and relayed to Fat Prophets who will make decisions judged to be in the investors’ best interests.

Some providers of managed investments choose to also act as the custodian. Fat Prophets does, and always has chosen to appoint large, reputable providers of custodial services such as J.P. Morgan and HSBC. Fat Prophets’ custodians are members of the Australian Custodial Services Association (ACSA).

Please refer to ASIC’s regulatory guide relating to this topic and/or ACSA’s institutional investor services information.

If your question hasn’t been answered please emails us at wealth@fatprophets.com.au or call our Wealth Management Team on 1300 881 177.

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