Financial Services Guide
Please click here for a copy of our Financial Services Guide.
This guide is designed to assist you in deciding whether to use the financial services that we provide. It describes who we are and how we can be contacted, the services and products that we are authorised to provide, how we are remunerate, our professional indemnity insurance and how we handle any complaints you may have.
What is the role of the Trustee or Custodian?
The trustee’s role is to ensure investor’s interests are being protected at all times. In general terms, the role of the Custodian is to separately hold all the assets, including the title deed of the property and bank accounts of the fund, on behalf of the investors.
What is the role of the Responsible Entity?
The Responsible Entity is granted all powers in respect of the Fund that could be exercised by a natural person or a body corporate as if it were the absolute and beneficial owner of the properties of the Fund (and any other assets of the Fund). The Responsible Entity may appoint an agent to hold the title to the Properties (and any other assets of the Fund) or otherwise carry out any functions of the Fund.
What is the Constitution for?
The Constitution is the document that governs the relationship between the Investors and the Responsible Entity. It regulates the rights and obligations of the Investors and the Responsible Entity and sets out the powers of the Responsible Entity in operating the Trust.
What is a Compliance Plan?
As required by law, each Registered Scheme must have a Compliance Plan that has been lodged with ASIC and sets out measures that the Responsible Entity shall apply in operating the Trust to ensure compliance with the Corporations Act and the Constitution.
What is the role of the Compliance Committee?
The Compliance Committee is established to monitor compliance by the Responsible Entity with the Compliance Plan and report to the Responsible Entity on a regular basis regarding its compliance with the Compliance Plan, the Corporations Act and the Constitution.
The Compliance Committee is to report to the ASIC if the Responsible Entity does not address any issues raised in an adverse report issued to the Responsible Entity. The Compliance Committee is comprised of 3 members, with two thirds of the committee being “external” under section 601JB(2) of the Corporations Act.
What is the nature of the investment?
Each Investor becomes a unit holder in the Fund. Units are issued in proportion to the amount invested relative to the total net asset value of the trust’s assets. As a result you effectively become a part-owner of the Property.
The assets of a Westbridge trust are generally physical property of a commercial nature. The Offer Document specifically details the assets and/or intended assets.
Issues relating to a Fund can be voted on by Investors as provided for in the Constitution. Voting rights will be proportional to the amount of each Investor’s interest.
By completing and sending an Application Form to the Manager, you are agreeing to be bound by the Constitution and the acknowledgements contained within the Offer Document.
How do I invest in a Westbridge Fund?
You may either:
- Contact Westbridge on 08 9321 5566 or email firstname.lastname@example.org to request a copy of the relevant Information Memorandum or Product Disclosure Statement.
- Register your interest online to receive a copy of the relevant Information Memorandum or Product Disclosure Statement.
Applications can only be made on an Application Form attached to an Information Memorandum or Product Disclosure Statement and accompanied by the appropriate payment.
Can my SMSF purchase units in a property fund?
Yes, complying and self managed superannuation funds may invest in our property Funds.
How is the fund income collected and expenses paid?
The Responsible Entity arranges for income from the Properties (rent) to be collected and pays it into the proceeds fund. Out of the proceeds fund, the Responsible Entity pays all costs, charges, expenses and outgoings it properly incurs. These include the Responsible Entity’s and Manager’s fees, property outgoings, establishment costs, administration and audit costs, Custodian and Compliance Committee fees, bank fees, government charges and taxes.
How are Distributions Paid?
The Constitution provides that the Responsible Entity will (if appropriate) make distributions out of the net balance in the proceeds every month or quarter (subject to trust distribution periods). The Responsible Entity determines the amount to be distributed. Any net income (after expenses) received into the proceeds fund that are not distributed to investors, remain the property of the Fund (and therefore unit holders/investors).
Generally, a portion of the distributed income you receive will be tax advantaged, resulting in less income tax being payable on that distribution in the year it is received.
What is tax advantaged or tax deferred Income?
Tax advantaged or tax deferred income is derived from property trust distributions, generally as a result of building allowances and depreciation allowances and the amortisation of the costs of borrowing. The amount of tax deferred distributions received by investors varies depending on the circumstances of the trust. No income tax is payable by investors on that proportion of the distribution received that is attributed to tax deferred income.
However the tax deferred income received reduces the cost base of an investor’s original investment (purely from a tax accounting perspective, it does not reduce the actual dollar amount invested) in the trust. This results in an increase in the amount of the capital gain on disposal of that investment. But if the relevant asset is held for more than 12 months an investor is generally entitled to a discount on the capital gains tax and for an individual investor only 50% of the capital gain is taxed at the investor’s marginal tax rate.
Tax deferral has two clear benefits. Firstly it provides greater cash flow during the investment term as a portion of the income received is not taxable in that year. Secondly at the end of the investment term, provided the investment is held for longer than 12 months, discounted capital gains applies, reducing the tax payable by up to 50%.
What if I need to get my money back early?
Essentially our property funds are illiquid and invested funds are not returned until the property is/are sold. Investors may exit earlier by the independent sale of their Units to a third party and you can contact the Manager to assist with the relevant documentation and information in this regard.
Why should the Fund borrow money to acquire the property?
Borrowing or gearing into an investment is a long held strategy that can significantly enhance the return on that investment. This is because the borrowed amount generally remains the same (assuming interest only payments), whilst the property value is likely to increase over time. However, the reverse can also apply should the property value significantly decrease, in which case the losses can be magnified.
A sensible borrowing policy or gearing level helps to manage any downside risk.
Unlike an investor borrowing in their own name to invest, our Funds use non-recourse borrowings to limit any liability of investors to their initial investment amount only.
How much will the Fund borrow?
The levels of approved borrowing may vary in each Fund, however our policy is to only borrow up to around 50% of the property value.
What is non-recourse Borrowings?
All borrowings on behalf of a Fund are secured solely against Fund property (non-recourse to investors). This means that you have no financial or other commitment beyond your investment into that trust.
What is a Gearing Ratio?
A gearing ratio indicates the extent to which the Fund’s assets are funded by external liabilities (debt).
How is Interest Cover Calculated?
An Interest Cover Ratio (ICR) is a measure that shows how many times the Fund’s earnings can meet the Fund’s interest expense each year. For example if a trust has an income of $300,000 and an annual interest payment of $100,000 then its ICR is 3:1.
Will I receive updates on my Investment?
You will be kept aware of the status of your Investment with quarterly income statements and other periodic reports.
Will I receive an Annual Tax Statement?
All investors in each Fund receive an annual tax statement within three months of the end of each financial year.
What other information or communication will I receive?
All investors in each Fund will receive an Annual Report, providing information on the Fund’s activities for that year.
We also produce periodic newsletters providing a variety of information including trust updates, property market information and new investment offerings. Information held on our website is also frequently updated and we recommend investors and potential investors review the website content on a regular basis.
How do I notify you of any changes to my details?
It is important that you inform us of any changes to the details you originally submitted on the Application Form when investing. Any such change must be notified in writing and signed by all parties who signed the original Application Form. In order to assist with this process, refer to the Change of Investor Details form on our website.