Frequently asked questions
What type of investments do you make?
We make investments for our clients in companies listed on the Australian Stock Exchange.
Do you have a licence to provide this service?
Harper Bernays Limited holds an Australian Financial Services Licence (AFSL #230635) issued by the Australian Securities and Investments Commission (ASIC).
What is the minimum investment size you will manage?
The preferred minimum portfolio that we manage is $1 million. A portfolio can be established with existing shares and/or cash.
What type of return can you generate on my investment?
We do not in any way guarantee investment performance. However information on this web-site provides you with historical client performance since inception.
Structure of the investment
Is my investment pooled together with others or is it separately managed?
Your investment portfolio is held separately and, unlike a unit trust or similar scheme, it is neither pooled nor invested immediately. Your portfolio is individually managed under a Management Agreement between yourself and Harper Bernays Limited. The investment strategy is tailored to suit your own investment objectives and risk profile, and investment decisions are made in your portfolio when opportunities arise.
Who will hold my cash and shares?
An independent Custodian nominated in your Management Agreement will hold all of the assets in your portfolio. All cash will be held in the Custodians' cash management account or bank bills.
What role does the Custodian perform?
Apart from holding your shares and cash, the Custodian has a Power of Attorney signed by you that allows them to settle all the portfolio transactions (such as buy and sell orders with stockbrokers), collect all dividends and interest, correspond with listed companies and their share registries, and sign documents (such as applications for floats, acceptance of takeover offers etc.) on your behalf. As a trusted third party directly appointed by you, you can rely on the Custodian to provide accurate and reliable reporting, as well as the safekeeping of your assets.
Whose name will my investments be registered in?
Each of your investments will be registered in your own name (or where your investment portfolio is an entity such as a company or superannuation fund, the name of that entity). The registered address of each investment will be the address of the Custodian.
Operation of the portfolio
How does Harper Bernays participate in the market?
Harper Bernays is an active institutional investor. Each day we monitor the activity in the market, talk with the leading institutional stockbrokers and analysts, and meet face-to-face with the management of listed companies. On behalf of our clients, we also participate in new floats, share placements and sub-underwritings.
We execute buy and sell orders for our client's investment portfolios through stockbrokers, who, in turn, settle these transactions directly with your nominated Custodian.
Who will manage my portfolio?
You will have direct access to the investment managers who manage your share portfolio. They are salaried employees of Harper Bernays Limited and they do not receive any commissions or other benefits for making investment recommendations for your portfolio.
What types of reports will I receive about my portfolio?
Each month you will receive a valuation statement and transaction report, which clearly shows the market value of each of your investments, details of any acquisitions or disposals made throughout the month, as well as any interest and dividends you have received. Your Custodian prepares this report independently. We reconcile all transactions in your portfolio to bank each month to ensure correctness, before the reports are sent to you.
Each year the Custodians will also prepare a number of reports designed to assist you in simplifying your taxation affairs. These reports include capital gains tax reports, income and expense reports, dividend imputation reports to name a few. GST reports to assist you in completing your Business Activity Statement can also be prepared.
For your convenience, we can also arrange for any of these reports to be sent directly to any other people you may nominate such as your accountant, tax agent or trustee.
Management agreement and fees
Can you explain how your management agreement works?
Essentially Harper Bernays Limited is contracted to manage your investment portfolio on a discretionary basis. Unless you have any specific requirements (such as instructing us not to invest in a particular stock or sector) we will make investment decisions on your behalf as we see fit. The agreement with us can be cancelled with sixty (60) days written notice and, as all your investments are registered in your name, there is no need to liquidate the assets to withdraw them. In addition, we are bound by our agreement not to disclose your affairs to any other party (unless otherwise required by law).
Can you explain how you charge for your service?
Our management fee is paid directly from your investment portfolio and in most cases this fee is tax deductible. Fees are clearly disclosed in your Monthly Reports provided by the Custodian. The fee is calculated based on the market value of the portfolio at the end of each month. There are no establishment fees or exit fees and the monthly management fee is inclusive of all custodial charges and GST.
Do you offer a choice of fee structures?
You have the option of nominating the fee structure that best suits your requirements. We offer two different fee options: a Standard Fee or a Performance Fee. Minimum monthly fees apply to both options. All fees are payable on a portfolio basis and not a client basis (where clients have more than one portfolio) as, unavoidably, so many of our external and internal costs are incurred on a portfolio basis.
Standard Fee Schedule
| Fees for amounts between: | Standard Fee Rate | Fee Charged (incl. of 10% GST) |
|---|---|---|
| 0 - $500K | 2.1% | 2.31% |
| Next - $500K | 2.0% | 2.2% |
| Next $1m | 1.8% | 1.98% |
| Next $1m | 1.75% | 1.925% |
| Next $2m | 1.65% | 1.815% |
| Next $5m | 1.5% | 1.65% |
| Next $5m | 1.25% | 1.375% |
| Next $5m | 1.0% | 1.1% |
| Amounts greater than $20m | By negotiation | By negotiation |
| Minimum Monthly Fee | $1,250 | $1,375 |
Performance Fee Schedule
| Portfolio Size: | Fixed Fee Rate | Fixed Fee Rate (incl. of 10% GST) |
|---|---|---|
| 0 - $2m | 1.5% | 1.65% |
| $2m - $3m | 1.25% | 1.375% |
| $3m - $5m | 1.1% | 1.21% |
| Over $5m | 1.0% | 1.1% |
| Minimum Monthly Fee | $1,250 | $1,375 |
| Performance Fee | In addition to the fixed fee, the client pays 15% (plus GST) of all net gains above the previous high water mark for the portfolio, calculated on a quarterly basis. (No performance fee is payable in any Quarter unless the previous quarterly “high water mark is exceeded.) | |
Investment considerations
What type of investment approach do you take?
We classify our investment approach as "stock specific".
What time frame do you consider when you make an investment?
We take a long-term view with the investments that we make. Our resolve to invest with a long-term objective is imperative as it ensures that through periods of extreme volatility, investment decisions do not yield to investor emotions.
What is your investment philosophy?
Our investment philosophy can be explained as "long-term investments in companies led by capable management that are able to deliver consistent growth in earnings".
How do you make decisions to buy and sell stocks?
Our decisions to buy and sell are based on extensive research into each company, and a variety of considerations such as our assessment of the company's business model, the ability of the management to execute its business plans, the potential for strong earnings growth, the current market valuation and sentiment. Additionally we also take into account specific client needs when reviewing buy and sell decisions.
Investment advice
How do I establish an investment portfolio with Harper Bernays?
Firstly, our investment team would like to meet with you to discuss your investment objectives and better understand your financial circumstances and risk profile. You will be required to provide personal details (such as your tax file number) and nominate your preferred fee structure and Custodian. Once you have signed a management agreement, we will establish your individual portfolio with either cash and/or the existing share portfolio you provide to your Custodians. We can then commence making investments on your behalf, as and when investment opportunities arise.
