1. To whom it may concern
Proposal for the provision of direct share services
Bell Potter Securities Limited
January 2010
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2. Table of Contents
1. Key Features
2. Bell Financial Group Structure / Bell Potter Securities Profile
3. About Us
4. Our Services
5. Research
6. Portfolio Review Service
7. Model Portfolios
8. Statements of Advice / Additional Advice
9. Corporate Activity and Syndication Capability
10. Client Presentations
11. Fees and Commissions
12. Internet Access
13. Credentials and Contact Details
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3. Key Features
1. Full service share trading capability – and Execution, Clearing and
Settlement services
2. Research - Quality rated equity research, both Bell Potter’s internal
research and the Bell Potter badged UBS research
3. Model Portfolios – Individually Managed Accounts (IMAs) on a non-
discretionary basis using a model portfolio approach to investing
4. Statements of Advice / Additional Advice - Issue of SoAs and SoAAs
for the provision of Personal Financial Advice as required
5. Account Servicing - Support to planners in developing their business
6. Channel Management - Client relationship remains with the planner
7. Agreement - Covered by an intermediary agreement
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4. Bell Financial Group
Structure
Bell Group Holdings: 49.0% ASX Listed: BFG
UBS AG, Australia: 17.4%
100% 100% 100% 36%
I Equities I Cash I Institutional I Online broking
I Futures and FX I Margin Lending equities I Equities - retail
I Equity Capital and wholesale
Markets
I Commodities
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5. Bell Potter Securities
Profile
I Part of the ASX listed Bell Financial Group of companies
I Australian owned, full service private client stockbroking and financial
advisory firm
I Backed by leading Investment Banking and Research resources
I Services include: equities, equity capital markets, foreign exchange,
futures, commodities, margin lending, cash and superannuation
I One of Australia’s largest retail stockbroking businesses
— 12 offices nationally
— 300 advisers servicing over 200,000 clients
I Full service offering including research on 270 companies through 70
analysts
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6. About Us
The Team
Planners will be serviced by the following Bell Potter team:
Intermediary Services
– Hamish Church, Equities Adviser
– Mike Williams, Equities Adviser
– Atika Brown, Equities Adviser
– David Lyons, Equities Adviser
– Gary Aitkenhead, Equities Adviser
– Sam Byrnes, Desk Assistant
– Colin Davidson, Director, Product and Marketing
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7. Our Services
Overview
I Highly rated research, specifically designed for private clients
I Model portfolio investment approach
I Portfolio Review service
I Provision of Statements of Advice
I BPS’s Monthly Investor Newsletter
I BPIS (Bell Potter Intermediary Service) Tailored Monthly Newsletter
I User-friendly website, accessible to Intermediaries
I Access to IPO’s and placements
I Staff available to present at seminars / conferences / PD days
I Commission rebates, where applicable
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8. Research
Clients seeking general information, company research and
comparison tables are serviced through:
I Daily Communiqué
I Monthly and Quarterly Investor Reports
I Specific company research – choice of institutional style notes or concise
company profiles (2 pages)
I BPS Monthly Investor Report
I Updates/ comment on strategy or stocks of interest (emails
predominantly)
I Hybrid and fixed interest commentary
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9. Research
I Our in-depth research can add value to the
performance of a client’s portfolio.
I Access to the expertise and resources of our
in-house research team, covering Australia’s
top ASX listed companies through BPS’s
distribution agreement with UBS, as well as
an array of smaller mid-cap and emerging
companies.
I Access to comprehensive economic and
market commentaries.
I Our research network delivers quality
analysis, general advice and a wide range of
printed and online communications
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10. Portfolio Review Service
I Provided for professional, prompt reviews of clients’ existing portfolios or
for new portfolio proposals.
I No fee is charged for this service, however there is an expectation that
where recommendations are implemented, the transactions will be
executed through BPS
I We reserve the right, subject to due notice, to invoice a service charge of
not less than $200 per review (up to 20 stocks, $10 per extra stock) should
this not occur
I All stocks recommended are researched by Bell Potter and summaries are
available on Bell Potter’s website
I Our commitment is to produce Portfolio Reviews within 48 hours of the
time of request
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11. Model Portfolios
We use a model portfolio approach when advising planners on their clients’
direct share portfolios.
Portfolios can be either:
Tailored to suit the client’s requirements; or
The Model Growth Portfolio which is used to construct the portfolio,
subject to the client’s investment profile.
Client accounts are operated as Individually Managed Accounts (IMA) on a
non-discretionary basis when using model portfolios.
NOTE: The BP model growth portfolio performance can only be replicated if a client’s portfolio is in all
respects an accurate reflection of the model growth portfolio, including changes made by the fund manager,
stock weightings, acquisition and sale quantities and prices and any other activity on the portfolio
undertaken by the manager whilst managing the underlying investments.
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12. Model Portfolios
Concentrated Portfolios
The model portfolios we use have a fewer number of stocks, typically
13 parcels, compared to a traditional long only managed fund which
may have up to 50 or more.
The rationale for the concise number of stocks in model portfolios is
as follows:
Sufficient stocks to control stock-specific risk. Therefore, one poor
investment does not ruin the performance of the portfolio for years after
Most of the stocks are blue-chip/ ASX100 Index names. However,
because of the limited number of stocks, they have large weightings
compared to their index weightings
Hence, the portfolios have the ability to outperform the benchmark
index and managed funds (despite the apparent commonality in
stocks), without venturing into higher risk, small or speculative stocks
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13. Model Portfolios
Advantages
Other advantages compared to managed funds include:
I Clients are buying into pre-existing CGT situations
I Stock holdings remain in the name of the client
I Modest turnover of around 20-25%p.a.
I Avoidance of unattractive stocks that may be in many managed funds
because many fund managers “hug” market indices, meaning they tend
to have holdings to some degree or other in most large stocks
I Above-average yield for the Growth Portfolio due to a value bias built in
to the portfolio
I Ability to incorporate tax considerations into buy/ sell activity
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14. Model Portfolios
Changes
Portfolio Changes
1. Although BPIS Model Growth Portfolio reflects a long term investment
horizon, changes occasionally occur due to factors such as:
• stock price movements,
• changes in our fundamental views, or
• corporate events such as mergers/ takeovers or de-mergers
Turnover of the portfolio is approximately 20-25%p.a.
2. A Model portfolio overcomes the inadequate “set and forget” approach to
managing investments or the formal review based on time periods (such
as quarterly, half yearly). The latter can lead to missed opportunities or an
unnecessarily delayed response to unfavourable developments
3. Planners are advised of the changes via phone and email on a timely
basis along with detailed commentary on the changes made.
4. Depending on the service selected, planners and clients can then decide if
they wish to replicate the change with their respective portfolio(s)
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15. Model Growth Portfolio
Investment Approach
1. Universe of Stocks
Stock selection predominantly focuses on the Top 100 Companies by
market capitalisation on the Australian Securities Exchange.
2. Company Valuation
Assessment of key business qualities, including confidence in management,
competitive strength with high market share high barriers to new
competition, lower risk of company failure and high forecast growth.
3. Stock Selection
Determined by active monitoring and assessment of the key business
qualities outlined above.
4. Model Growth Portfolio
13 stocks are held. Performance is measured on a total return basis relative
to the All Ords Accumulation Index and reported monthly.
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16. Model Portfolios
We use two Model Portfolios to assist in advising clients on their
direct share portfolios, plus a preferred stock list (2nd Tier) of
companies too small/ speculative for the above or which can’t be
included because they would result in an overweighting in a sector.
Both Portfolios are structured and managed by Mike Williams
The Model Portfolios represent our preferred stocks at any time
in two categories:
I Growth
I Income
The first two portfolios contain 13 stocks each and the Second Tier
has a variable number
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17. Model Portfolios
The rationale for the concise number of stocks in the Growth
& Income portfolios is:
Sufficient stocks to control stock-specific risk. Therefore, one poor
investment does not ruin the performance of the portfolio for years
after
All of the stocks are blue-chip/ ASX100 Index names. However,
because of the limited number of stocks, they have large
weightings compared to their index weightings
Hence, the portfolios have the ability to outperform the benchmark
index and many managed funds (despite the apparent
commonality in stocks), without venturing into higher risk, small or
speculative stocks
17

18. Model Growth Portfolio
This is run as a “live” portfolio. That is, purchases/ sales are inputted
as if they occurred and performance is calculated monthly (including
the collection & reinvestment of notional dividends).
The BPIS Growth Portfolio was created in May 2006 and therefore
now has 41 months history.
Performance - 41 months to 30 Sept 2009
BPIS Model Growth P’folio +26.1%
ASX 200 Accum. Index +5.2%
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19. Model Growth Portfolio
Additionally, in his previous stockbroking role, Mike Williams created
and managed the “Ord Minnett Model Growth Portfolio”. In the 82
months from its inception (August 1999), the Portfolio achieved the
following return:
Performance - 82 months to 30 April 2006
OM Model Growth P’folio +227.9%
ASX 200 Accum. Index +137.2%
Combined, the Model Growth Portfolios have outperformed the ASX
200 Accumulation Index by 5.5% pa (compound annual growth rate)
over the 10.25 years to 30 September 2009.
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20. Model Growth Portfolio
STOCK NO. SHARES PRICE VALUE WEIGHTING
31-Aug-09 $ %
AGK 720 13.96 10,051 8.4%
BHP 270 36.80 9,936 8.3%
CSL 300 32.21 9,663 8.0%
MQG 180 50.80 9,144 7.6%
ORI 415 22.58 9,371 7.8%
PDN 1,700 4.60 7,820 6.5%
QBE 430 22.88 9,838 8.2%
SHL 660 13.98 9,227 7.7%
TCL 1,761 4.04 7,114 5.9%
TOL 1,176 7.97 9,373 7.8%
WBC 410 24.37 9,992 8.3%
WOW 350 28.02 9,807 8.2%
WPL 180 49.00 8,820 7.3%
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21. Model Growth Portfolio
Stock Selection:
I Buy (or at worst neutral) recommendation by analyst
I Earnings growth allied to favourable PEG ratios (PE relative to
earnings growth)
I Favourable industry structure or dominant position in industry
I Favourable external environment
I Competent operational & financial management
I Appropriate balance sheet
I Scope for dividend growth or higher dividend payout ratios
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22. Model Income Portfolio
STOCK NO. SHARES PRICE VALUE WEIGHTING Est. '
09/10 Yield FRANKING
31-Aug-09 $ % % %
CBA 140 46.00 6,440 9.4% 5.0% 100
CCL 600 9.91 5,946 8.6% 4.6% 100
CIF 2,462 1.55 3,816 5.5% 9.0% 0*
DUE 1,950 1.53 2,984 4.3% 13.1% 0*
GFF 3,501 1.54 5,392 7.8% 7.4% 31
IFN 4,000 1.35 5,400 7.9% 6.7% 0*
MAP 2,201 2.56 5,635 8.2% 8.2% 0*
MTS 1,200 4.28 5,136 7.5% 6.1% 100
SGP 1,185 3.78 4,479 6.5% 6.0% 0
TLS 1,499 3.26 4,887 7.1% 9.8% 100
TTS 2,000 2.48 4,960 7.2% 8.9% 100
UGL 500 14.72 7,360 10.7% 4.2% 100
WBC 260 24.37 6,336 9.2% 4.3% 100
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23. Statements of Advice (SoA)
Service Levels
Service Level SoA
Issued
Execution, Clearing and Settlement (ECS)
In relation to transactions in Financial Products listed on the No
ASX or an exchange recognised by the ASX.
No advice provided
General Advice
Which does not take account of any person’s financial situation, No
particular needs or investment objectives
Personal Financial Product Advice
Only provided when Bell Potter has been given the opportunity Yes
to take account of the recipient’s personal financial situation,
particular needs and investment objectives
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24. Corporate & Syndication Capability
I Bell Potter’s strong retail distribution network gives us access to some of the
best domestic and international public equity and other securities issues
I In addition to priority access to issues sourced from UBS, Bell Potter has
strong relationships with all the major investment banks
Bendigo & Adelaide Bank Westpac Banking Corporation National Australia Bank Ltd GPT Group Suncorp-Metway CPS
$50m Placement $2.5 billion Placement $3.0 billion Placement $2,217 million Entitlement Offer $766 million IPO
Co- Manager Participant Participant Participant Participant
December 2008 December 2008 November 2008 October 2008 May 2008
AMP Limited WestpacStapled Preferred Security Wesfarmers Limited St George Bank Limited
$450.0 million Placement $1.03 billion Placement $1.6 billion Entitlement Issue $400 million CPS II Hybrid
Participant Co-Manager Co-Manager
Participant
November 2008 May 2008 November 2007
July 2008
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25. Planner Support
“PQ Seminars”
Bell Potter’s Director of Research, Peter Quinton, is available for major client
presentations – for instance, his twice-yearly “PQ Seminars” are very popular
and well received
Peter also produces significant slide show material that is available to the BPIS
team. In addition, Bell Potter has a dedicated Marketing department for all
presentations
Planner Support
Together with our research base, BPIS can conduct investor seminars with a
range of subjects and educational themes. This includes providing speakers,
including advisers from the BPIS team, who can present to planners in a
jargon-free, user friendly style.
Many planners have found these seminars important in building and
maintaining their client base.
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26. Fees and Commission
Financial Planners have the ability to create a revenue
stream from conducting both execution-only and advice
business
Bell Potter will charge brokerage at the agreed brokerage
on a commission share basis
However, the planner can charge an additional rate of
brokerage (either a dollar amount or percentage) which will
be rebated back to the dealer group at the end of the
month
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27. Internet Access
Facility to tailor our internet
service to meet BT planners
needs
Online research, watchlists,
charts, ASX announcements,
live prices and market indices
Planners can access all their
clients from a single login
Portfolio valuations, client ledger
and cash account statements
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28. Our Credentials
Hamish Church – Equities Adviser
Hamish has been a private client, institutional and intermediary adviser with Bell
Potter Securities Ltd for close to 4 years. With just under 10 years experience in
financial services, Hamish was formally an Adviser with Leyland Private Asset
Management Pty Ltd, where he specialised in building and advising the IMA
(Individual Managed Account) business. Prior to this, he has held roles with Citigroup
(Dublin), Equity Growth Management (Corporate Advisory) and Wealth Strategies
Pty Ltd (Financial Planning).
Hamish holds a Bachelor of Business and a Diploma of Financial Planning and is an
active member of the Securities and Derivatives Industry Association (SDIA). As an
accredited securities dealer, Hamish provides advice on Australian and international
equities, listed and unlisted managed funds and fixed interest products,
superannuation and retirement savings, Government bonds and
debentures. Hamish is also Level 2 Options accredited.
Hamish works closely with financial planners and accountants to advise clients in all
aspects of equity investments, specialising in portfolio construction and
management.
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29. Our Credentials cont…)
Mike Williams – Portfolio Manager
Mike established Bell Potter Intermediary Services in May, 2006. Prior to this, Mike
established Ord Minnett’s Intermediary Services in 1999 and managed it for over 7
years. This was preceded by a career of more than 20 years in funds management and
institutional stockbroking
Mike’s last funds management role was with FAI Life, where he was responsible for the
Capital Guaranteed Fund. Prior to this, Mike worked for Ord Minnett Securities as a
small companies analyst and before that was Associate Director –Equities with BZW
Investment Management Ltd. During his 6 years with BZW, the domestic equity fund,
for which Mike was responsible, outperformed the All Ordinaries Index by 3% per
annum
Previously, Mike filled various analytical and funds management roles with PNC
International, Consolidated Press Holdings, CSR, AMP and Renison Goldfields
Mike is Level 2 Options accredited.
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30. Our Credentials (cont…)
Atika Brown – Equities Adviser
Atika is a Private Client Adviser with 11 years experience in the Financial Services
industry. Atika has been advising clients in Australian equities and derivatives for 9 years
and was formally with Ord Minnett Limited for 8 years before joining Bell Potter in 2006.
Atika holds a Bachelor of Science and a Graduate Diploma in Applied Finance and
Investment and is accredited to deal in Australian and international equities, fixed
interest, government bonds and debentures.
David Lyons – Equities Adviser
David Lyons is an Associate Private Client Adviser. David holds a Bachelor of Commerce
(Finance and Economics) and a Bachelor of Science (Psychology) and has 5 years
experience in the Financial Services Industry. David previously worked with Deutsche
Bank (CDS and Interest Rate Derivatives) before joining Bell Potter in 2006. David has
also worked as an intern management consultant with The Phoenix Group.
David is accredited to deal in Australian and international equities, listed and unlisted
managed funds and fixed interest products, superannuation and retirement savings,
government bonds and debentures.
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31. Our Credentials (cont…)
Gary Aitkenhead – Equities Adviser
Gary is responsible for servicing the Intermediary Services client base, with special
emphasis on portfolio reviews. Prior to this, Gary worked at Ord Minnett and Shaw
Stockbroking in a similar capacity, the latter specifically catering to the needs of the
ING/ RetireInvest financial planner network under an outsourcing arrangement. Prior
to this role, Gary held the position of Senior Dealer with BNP Paribas (Short Term
Interest Rate desk) and a variety of roles with Westpac, mostly in fixed interest and
foreign exchange operations
Gary is Level 2 Options and CFD accredited
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32. Our Credentials (cont…)
Sam Byrnes – Desk Assistant
Sam Byrnes joined Bell Potter as a Dealer’s Assistant in February 2008. After
graduating from the University of Wollongong with a Bachelor of Commerce
majoring in Accounting and Finance Sam was formally employed with
Macquarie Bank (Equity Markets).
Sam is the first port of call for any administrative issues or problems as well as
for advice on challenging exercises (such as equity sales for deceased estates).
Colin Davidson – Director, Product and Marketing
Colin’s responsibilities at Bell Potter include internal and external marketing, product
management including Bell Potter’s superannuation service, third party products,
business development within the adviser network, media relations and corporate PR.
Previously worked for Commonwealth Securities and St George Bank. Prior to this he
worked for a number of years as an institutional stockbroker in Asia with Indosuez WI
Carr servicing regional fund managers. He is a Chartered Accountant.
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33. Our Contact Details
Bell Potter Securities
Level 33, 225 George Street, Sydney
Toll Free 133 788
Facsimile 02 9255 7485
Hamish Church hchurch@bellpotter.com.au 02 9255 8120
Mike Williams mswilliams@bellpotter.com.au 02 9255 7437
Atika Brown abrown@bellpotter.com.au 02 9255 8129
David Lyons dlyons@bellpotter.com.au 02 9255 7423
Gary Aitkenhead gaitkenhead@bellpotter.com.au 02 9255 7408
Sam Byrnes sbyrnes@bellpotter.com.au 02 9255 7277
Colin Davidson cdavidson@bellpotter.com.au 02 9255 7467
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34. Bell Potter
Intermediary Services
www.bellpotter.com.au
ABN 25 006 390 772 AFS Licence No. 243480
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