A person can be authorised under the Financial Advisers Act (FA Act) to provide personalised DIMS to retail clients.
Personalised DIMS focuses on the way you decide what investment decisions to make for that particular client. If you have discretion to make investment decisions for your client and you have a bespoke investment strategy specific to his or her financial position and goals, you will be providing personalised DIMS.
It is important to note that personalised advice around investment strategy designed for a class of investors is not personalised DIMS.
To learn more about how to be authorised go to licensing page for Authorised Financial Advisers.
As an AFA providing personalised DIMS, you must be honest in how you conduct and provide your service, always acting in your client’s best interest.
You must not use information gained as an AFA to benefit yourself or any other person, or cause harm to your client.
You must also exercise care, diligence and the skill of a professional in carrying out your duties.
AFAs providing personalised DIMS to retail investors under the FA Act need to provide their clients with ongoing and annual information. Your client reporting obligations can be found here.
Your ongoing reporting requirements are:
You will also need to provide annual reporting to your retail investors on the following:
|Investor’s portfolio return||
Annual and five-year return of the portfolio (pre-tax but after fees)
A bar graph of the portfolio’s return (pre-tax but after fees) with a bar for each disclosure year since the investor started using the service
|Portfolio profile||Name each class of the financial products in the investor’s portfolio, the products’ issuers, and the number of products in the portfolio|
|Cash held||Details of the amount of cash held for the investor at the close of disclosure year|
Details of dividends paid, all interest paid, and other distribution or income received