Financial Services Guide

Issued by Clover.com.au Pty Ltd, ABN 83 602 834 597, AFS Licence No. 479416

Date of this document

This Financial Services Guide (“FSG”) was prepared on and is dated 16 July 2018.

Clover.com.au Pty Ltd as issuer of this FSG

This FSG is issued by Clover.com.au Pty Ltd, ABN 83 602 834 597 Australian Financial Services Licence No 479416 (“Clover”, “we”, “us”). We will update this FSG from time to time to provide you with information about new services or changes to existing services. We will publish these changes on our website at www.clover.com.au.

You acknowledge that you will be bound by any changes 7 days after publication and you will review our current FSG prior to undertaking any transaction in financial products. If you proceed to obtain advice from Clover.com.au, you should read this FSG in conjunction with any Clover Managed Discretionary Account (MDA) Contract and Statement of Advice (SOA)/Investment Program that you might receive in interacting with the Clover.com.au website.

Purpose and content of this Financial Services Guide

This FSG is an important document and has been designed to assist you make an informed decision about whether to use our Managed Discretionary Account (MDA) service. You should read this FSG carefully before you to decide whether to obtain the financial services offered by us. This FSG contains important information about:

  • what an MDA is, and the significance of giving Discretionary Authority to us;
  • who we are;
  • details of the financial services that we are authorised to provide;
  • how we can be contacted;
  • how you can instruct us;
  • the documents you may receive from us;
  • significant risks associated with opening, maintaining and investing through an MDA;
  • what you must do before we can provide our MDA service;
  • the current fees and charges applicable;
  • your privacy and how your personal information will be dealt with;
  • how complaints can be lodged by you and are dealt with by us; and
  • the compensation arrangements currently in place.
Who is Clover and what services are we authorised to provide?

Clover is a financial services business that provides general and personal advice to retail and wholesale clients, and is authorised to deal in the following classes of financial products (within the definition of the Corporations Act 2001):

  • basic deposit products;
  • interests in Managed Investment Schemes excluding Investor Directed Portfolio Services;
  • interests in Managed Investment Schemes limited to MDA services; and
  • securities.

Clover's MDA service can be accessed directly through Clover's website or, at Clover's discretion, through a financial adviser nominated by you (Nominated Adviser).

Clover’s website provides general information about investing in Exchange-Traded Funds (ETFs) and MDA Services. Some of the content (such as blog pieces) may also be construed as general advice. Where we provide general advice, that advice does not take into account your personal and financial circumstances, needs and objectives, and as such, you must consider the appropriateness of the advice with regards to your personal and financial circumstances before acting on that advice.

You may also receive personal investment advice from Clover should you elect to do so. To provide this advice Clover may take into account your stated financial objectives, financial situation and needs (relevant Personal Circumstances) based on the information you provide on the Clover website. This will enable us to assess your personal circumstances and suitability for an Investment Program which is offered as part of the MDA service.

Should we believe our service is suitable for you, we will provide an MDA Contract which includes a Statement of Advice (SOA) and Investment Program that complies with Division 3 of Part 7.7 and Division 2 of Part 7.7A of the Corporations Act. You are required to carefully read these important documents. Should you then wish to proceed with the advice and access Clover’s services, you will need to execute an MDA Contract to commence your relationship with Clover. Any personal advice we provide will be valid for 15 calendar days from the date of issuance of the SOA. After this period, any lapsed SOA will be inactive and not able to be acted upon. If you have not acted on our advice within that time you may need to engage with us online again to have a new SOA and Investment Program issued.

Using a financial adviser

Before investing in the MDA Service, you may have received personal advice from an approved Nominated Adviser, on an initial and ongoing basis, regarding the financial products and services available through Clover.

Where this is the case, the Nominated Adviser will provide you with an SOA for any such personal advice. Clover will not provide personal advice to investors who are clients of a Nominated Adviser.

Your MDA service will be operated on an ongoing basis by Clover in conjunction with your Nominated Adviser. Your Nominated Adviser will have the same level of authority on your MDA service as you do. Your Nominated Financial Adviser will not, however, be able to change your linked Cash Management Account (CMA).

For more details regarding your Nominated Adviser please refer to the FSG provided by the Nominated Adviser.

What is an MDA, and what is the significance of giving discretionary authority to Clover?

A Managed Discretionary Account (MDA) is an account established in your name, which is used to make investments on your behalf in accordance with your Investment Program. Under the MDA you give us a discretionary authority to provide certain investment management services to you without the need, on each and every occasion, for us to consult you and get agreement or instructions to sell, buy, apply for or redeem investments in financial products prior to actually doing so. Specific and on-going discretionary authority is given to us as part of the MDA Contract, and we are obliged to manage your MDA portfolio in accordance with the agreed Investment Program and that authority. The Investment Program contains details of the types of investments to be held in your portfolio, and is presented as part of the MDA Contract. The Investment Program may also provide some or all of the following information:

  • the nature and scope of the discretions that Clover will be authorised and required to exercise;
  • any significant risks associated with the MDA Contract;
  • the basis on which the MDA Contract is considered to be suitable for you; and
  • warnings that the MDA Contract:
    • may not be suitable for you if you have provided limited or inaccurate information about your relevant circumstances; and
    • may cease to be suitable if your relevant circumstances change.

By giving us discretionary authority you are empowering us to deal and invest on your behalf at any time and to bind you to those dealings or investments, provided we act in accordance with your Investment Program, as if you'd given us the order or other instructions in the usual manner for dealings on an Account which is not a MDA. You will be the legal and beneficial owner of investments held in your MDA at all times, but we will control day-to-day trading or investment on behalf of your MDA.

Your MDA Contract and Investment Program must be reviewed at least once every 13 months to ensure it remains appropriate for you. If you have a Nominated Adviser they will be responsible for reviewing the continued suitability of your MDA Contract and Investment Program rather than Clover.

You will be able to access your MDA portfolio with Clover at any time, however your portfolio valuation will only be updated on a daily basis, and thus may not reflect intra-day investment transactions and changes in the value of your investment holdings within your Clover MDA service.

You may terminate your MDA Agreement with us by giving notice to us in accordance with the MDA Contract.

When and how can you instruct us?

When applying: You can inform us of your desire to access the Clover MDA service by agreeing to and electronically signing the MDA Contract. This commences the process of your entry into the Clover MDA service. We will then verify the information you have provided us to confirm your identity, in accordance with statutory Know Your Client and Anti-Money Laundering obligations. Once these requirements are satisfied we will commence the process of having your linked Cash Management Account (CMA) and Brokerage Account opened.

When making an investment: In order to invest in the Clover MDA service you first need to deposit funds into your linked Cash Management Account (CMA). We will place the initial investment orders to commence your Clover Investment Program after receiving cleared funds into your CMA.

When making a partial withdrawal: Requests to partially withdraw some of the balance in your Clover MDA service can be made via the ‘Withdrawal’ tab, located in Settings (the gear icon). It will generally take between 3 and 5 business days from the time we receive your partial withdrawal request to the time the funds are deposited into your linked Cash Management Account.

When updating your profile: You can notify us of any change in your personal circumstances by logging into your Clover account and updating your profile.

When terminating your MDA service: You can cease to use the Clover MDA service by terminating the MDA Contract. You can make an account closure request via the ‘Withdrawal’ tab. Once we receive your request we will commence the process of placing sell orders for all the investments in your Investment Program. The process of order execution, clearing, settlement and final transfer of the net proceeds to your linked CMA account may take up to 5 business days.

Some comments on risk

Because no one knows what the future will bring, there will always be risk involved in investing. If the future was knowable it would not be risky, and you cannot expect to an investment return without accepting some level of investment risk.

The various dimensions of investment risk are summarised below, and apply to investing in an MDA service such as that provided by Clover.

What are the risks?

Equity securities (such as shares) are ownership interests in companies. Companies, and thus the shares that evidence their worth, can decline as well as appreciate in value over time. The measure of this change in value is often referred to as volatility, in that the more the value varies over time, the more volatile the asset is and therefore generally the more risk involved in investing in it. On the other hand, the less volatile an asset is, the less likelihood there is for any significant capital gain or loss from investing in that asset. Equity securities are generally more volatile than other asset classes, in part due to the speed at which new information available to investors is incorporated into share prices.

In general the risks of investing in equities can be categorised in the following manner. (Please note that the lists below do not purport to be complete, as it would not be feasible to list all the possible risks in each category).

Overall market risk This is the risk of loss by reason of movements in the share market generally. These can be caused by any number of factors. Specific examples are changes in interest rates, political changes, changes in taxation or superannuation laws, international crises or natural disasters.

Domestic versus international factors The vulnerability of a company to international events or market factors influences the value of its shares. These would include movements in exchange rates, changes in trade or tariff policies and changes in other stock or bond markets.

Sector specific factors These include demand for the product the company produces, commodity prices, the economic cycle of industry, changes in consumer demands, lifestyle changes and changes in technology.

Stock specific factors These would include the robustness of a company’s corporate governance framework, the competence of its management and key personnel, its ability to define and execute its strategic objectives and its ability to respond appropriately to opportunities and threats.

Other risks associated with opening, maintaining and investing through a MDA

Portfolio diversification in accordance with your Investment Program and investment limits as part of your Investment Program are designed to reduce risk, but there can never be 'no risk'. A point you should consider carefully is that your MDA portfolio assets are invested without your involvement. All investment activity must be in accordance with the discretionary authority specified in your MDA Agreement and the Investment Program for the MDA. We will confirm transactions to you directly via our ASX Execution and Clearing agent, and you also have the ability to view those transactions on our website. Any unauthorised dealings are prohibited, and should they occur inadvertently, would be reversed or refunded to your MDA account in full. As you are the legal and beneficial owner of all investments in your MDA, any investment growth or profits are yours, as are any losses. Clover does not guarantee the investment or trading performance of your MDA, the performance of its investment strategy or the generation of any particular rate of return on the financial products traded or invested on your behalf.

What documents will you receive from us

If you engage Clover to provide you with personal financial advice, we will create an MDA Contract which will contain our advice to you in a Statement of Advice (SOA), together with an Investment Program detailing the recommended investment strategy. Where we have recommended investments that are part of a managed investment scheme, we will provide you access to a Product Disclosure Statement (“PDS”) for each such investment that has been recommended. Access to these documents will be via hyperlinks embedded within your SOA. These documents are prepared by the entity responsible for issuing the investment, and are designed to provide you with detailed information including the cost of, and any significant risks involved in, the investments.

If you have a Nominated Adviser then some of these documents will be provided by them rather than Clover.

What you must do before we can provide MDA services to you

Before a MDA can be opened and operated on your behalf, we are required to provide you with certain documents. As you progress through the Clover on-boarding experience, we will ask you certain questions to ensure that you understand the nature of the MDA Contract between you and us, the CHESS sponsorship agreement, the Broker account application process and the Cash Management Account provider. Our service providers may also contact you electronically via email to ensure that we are acting in accordance with your instructions. All Agreements and Account Application material must be duly completed in full and electronically signed before your MDA can be opened and your Investment Program commenced. A copy of the MDA Contract will be retained within the ‘Documents’ tab, located in Settings (the gear icon), as will all subsequent advice documents.

What fees will you pay for using Clover’s MDA service?

The below MDA Service fees apply when your Nominated Adviser recommends that you appoint Clover as the MDA Provider. The below fees do not include fees charged by your Nominated Adviser. Please refer to the Statement of Advice provided by your Nominated Adviser for full details of the fees.

Clover MDA Service Fee

Type of Fee/Expense


How is it Paid

Establishment Fee


Withdrawal Fee


Adviser Fee

Please refer to the Statement of Advice provided by your Nominated Adviser

Clover MDA Service Fee

0.30% p.a. + GST
For $20,0000 - $499,999.99

0.25% p.a. + GST
For $500,0000 - $999,999.99

0.20% p.a. + GST
For $1,000,000 - $2,999,999.99

0.15% p.a. + GST
For $3,000,000 - $4,999,999.99

0.10% p.a. + GST
For $5,000,000+

Calculated using an average monthly balance, based on the balance in your MDA Service during the calculation month. Deducted from your linked CMA account monthly in arrears.

Brokerage Costs

Brokerage costs of 0.055% of trade value (subject to a minimum of $6.00) per trade is payable on all funds deployed and invested into the MDA Service.

Brokerage costs are charged directly by the Execution and Clearing Broker.

ETF Management Fee

Varies by individual ETF, ranging from 0.07% per annum to 0.48% per annum. The ETF fees you face will be dependent on the ETFs used in your personalised Investment Program

Charged by the issuer of the ETF, but incorporated into its price (Net Asset Value). It is not an additional charge or deduction to the ETF holder.

By way of example, an investment of $50,000 in Clover’s MDA Service via your Nominated Adviser (without further contributions and ignoring capital changes) would incur MDA Service fees as follows. The below example does not include fees charged by your Nominated Adviser.

Clover MDA Service Fee example based on $50,000 initial investment via your Nominated Adviser (without further contributions and ignoring capital changes)

Type of Fee/Expense


How is it Paid

Establishment Fee


Withdrawal Fee


Adviser Fee

Please refer to the Statement of Advice provided by your Nominated Adviser

Clover MDA Service Fee

$165 p.a. (incl. GST)

Brokerage Costs

$30 (incl. GST)

ETF Management Fee

$80 p.a. (incl GST)

Based on an estimated 0.16% pa fee for a 60/40 Portfolio

Service Providers

In delivering its MDA Services, Clover utilises a number of financial service providers including, but not limited to, a Cash Management Account (CMA) provider, an execution and clearing (broking) service, an online identification verification service and a number of software-as-a-service (SaaS) providers of ancillary client relationship management, marketing and communication management and workflow management solutions.
Each service provider has been selected based on their compatibility with Clover’s MDA Service, and in no way impinges on Clover’s objectivity in providing our services to you.

The key service providers that you, as a Clover client, will interact with are:

Service provider

What is being provided?

Cash Management Account (CMA) provider

Macquarie Bank Limited (ABN 46 008 583 542), holder of an Australian Financial Services license (No. 237502), is the provider of the Cash Management Account (CMA) facility through which your contributions will be invested into the financial products as part of your Investment Program.

Execution & Clearing Broker

OpenMarkets Australia Limited (ABN 38 090 471 012) has been appointed as Execution and Clearing Broker for this MDA service.
OpenMarkets holds an Australian Financial Services license (No. 246405) and is a trading, settlement and clearing participant of the Australian Securities Exchange (ASX).

Nominated Adviser

Where Clover’s MDA Service is accessed via a Nominated Adviser, your Nominated Adviser will have the same level of authority on your MDA service as you.

Clover conducts periodic reviews of the service providers to the Clover MDA Service to ensure they continue to meet our requirements and deliver their services to the appropriate standard.

Relationships and Managing Conflicts of Interest

Clover.com.au Pty Ltd is a private company that is majority owned by entities connected to the founders and a number of other individuals. In addition, there are two financial service entities that have an economic interest in the company.

Equipsuper (Equip) is a superannuation fund that has an economic interest in Clover.com.au Pty Ltd. This relationship does not involve the use by Clover.com.au of any products or investments owned, operated or managed by Equip.

PSC Insurance Pty Ltd, a general insurance broker, also holds an economic interest in Clover.com.au Pty Ltd.

The relationship Clover has with Equip and PSC Insurance does not conflict with the provision of financial services to you. Clover does not receive any financial incentive to provide advice that directs a client towards either Equip or PSC Insurance.

Clover does not receive any financial incentives from any of the ETF providers that we use in our model portfolios. Any rebates that Clover receives in relation to cash amounts invested with the CMA provider will be passed onto you in full. Clover does not receive any commissions or payments from the Cash Management Account provider or the execution broker.

Clover also does not make any commission or other incentive payments to third parties. From time to time Clover may enter into arrangements with third parties in respect of promotions, competitions and other offers (together “activities”) that Clover may make available. Where these activities involve the payment by Clover to a third party, we will disclose the amounts of these payments to you.

Staff remuneration and benefits

Directors and employees of Clover.com.au are remunerated by way of salary and other employee benefits, and may also be eligible for discretionary bonuses. Some employees may also own equity (or options in respect of equity) in the company, and thereby may stand to benefit from the profitability, or an improvement in the valuation, of the company.

Privacy and privacy collection statement

The privacy of your personal information is of the upmost importance to us, and the protection of your personal information is a vital part of our relationship. As such, we will not disclose your information to any third parties unless required to do so in the provision of this MDA service, or if required by law. For details of how Clover may use and disclose your personal information and how you can access and update it, please refer to our Privacy Policy by visiting our website at www.clover.com.au/privacy

If you have any questions about our Privacy Policy please contact the Privacy Officer by writing to:

The Privacy Officer

P.O. Box 599

Collins St West

VIC 8007

Email: privacy@clover.com.au

If you wish to access your personal information please contact the Privacy Officer using the email above.

How we deal with complaints

Should you be of the opinion that the services provided to you are not at an acceptable level, you have the right to make a complaint. We suggest you put your complaint in writing so that the issues are fully documented and understood by all parties.
Your complaint should be addressed to:

The Complaints Officer

Clover.com.au Pty Ltd

P.O. Box 599

Collins St West

VIC, 8007

Email: complaints@clover.com.au

If you have a Nominated Adviser, please contact your Nominated Adviser with your complaint in the first instance. Your Nominated Adviser will act as the triage for all complaints. If your complaint relates to a service provided by Clover, Clover will contact your directly.

When we receive a written complaint from you in relation to a service provided by clover:
(a) we will initially respond with a written acknowledgement that we have received your complaint; and (b) we will aim to respond to all matters raised by the complaint within 30 days. If we do not resolve the complaint to your satisfaction, you have the option of pursuing your complaint with an external dispute resolution service.

Clover is a member (member number 37751) of the following independent complaints resolution body:

Australian Financial Complaints Authority (AFCA)
GPO Box 3
Melbourne VIC 3001
Telephone: 1800 931 678
Email: info@afca.org.au
Web: www.afca.org.au

Information on how to lodge a dispute with AFCA is available on its website.

You can also lodge your complaint with the financial services regulator, Australian Securities & Investments Commission (ASIC), by calling 1300 300 630.

If your complaint relates to a service provided to you by our Execution and Clearing Agent, Openmarkets Pty Ltd, we ask that you first refer this matter to your Nominated Adviser where applicable, or if you do not have a Nominated Adviser, directly to Clover. We will ensure Openmarkets contacts you directly.

Professional Indemnity Insurance and Compensation Arrangements

In accordance with section 912B of the Corporations Act (relating to retail client compensation arrangements), Clover maintains professional indemnity insurance cover that we have reasonably determined is adequate having regard to the nature and extent of the business and the responsibilities and risks assumed in connection with that business.