Each account must maintain the required minimum cash balance in its Self-Directed Portfolio.
If an account’s minimum cash balance falls below the required minimum in the Self Directed Portfolio, the account will be subject to Divestment, a system-generated sell-down of assets or cash transfer between portfolios that tops-up the cash balance to the minimum required balance.
Divestment occurs on the fifth business day of every month. Thresholds for accounts are as follows.
Investment - If an account’s balance falls below $500 of total FUM, divestment will top up the cash balance to $2,200.
Super (Accumulation) - If an account’s balance falls below 1.5% of total FUM, divestment will top up the cash balance to 2.2% (ceiling of $15,000).
TTR & Pension - If an account’s balance falls below 4.5% of total FUM, divestment will top up the cash balance to 5.2% (ceiling of $15,000).
Please use the Cash Balances report to assist with cash management of your client’s accounts should you wish to avoid divestment.
On the first business day of each month you will be notified by an ‘Alert’ if your client’s account’s is subject to divestment. You can use the Cash Balances report to assist with cash management of your client’s accounts should you wish to avoid divestment (found under Business Management > Management Reports).
Divestment: Sell-down process
Step 1: Check for unsettled inflight AUD Equity sell trades from Self-Directed Portfolio (SDP). If this does not cover the gap, Step 2 occurs.
Step 2: Cash movements, conversions of foreign cash holdings or sell downs of your assets will occur in the following order:
- Foreign currency cash from Self-Directed Portfolio - currency selection is based on largest to smallest AUD equivalent value.
- AUD cash from Tailored Portfolio (this only applies if you have a Tailored Portfolio)
- Foreign currencies from Tailored Portfolio starting with the largest to smallest AUD equivalent value (this only applies if you have a Tailored Portfolio)
- Australian Equities - starting with largest value of your security holding
- International Equities - starting with largest value of your security holding
- Managed Portfolio - AUD cash
- Managed Portfolio - foreign currency cash
- Managed Fund in your SDP - starting with:
- Managed fund with daily liquidity
- Managed fund with largest value - Managed Portfolio - starting with:
- Managed Portfolio with highest value ASX listed equity
- Managed Portfolio with highest value listed equity
- Managed Portfolio with highest value managed fund listing
- Managed Portfolio with highest value fixed income listing - Fixed Income securities in your SDP
- Term deposits in your SDP - starting with shortest term to maturity Any transaction costs or additional costs incurred as a result of this sell down process will be charged to your account.
Please note: There is a grace period where accounts less than 90 days old are not subject to divestment.