The Bulletin August 2018

FINANCIAL SERVICES
thing being valued, such as shares in a
company or units in a unit trust;
3. nature of the engagement including
whether it is a Valuation Engagement
or Limited Scope Engagement or
Calculation Engagement as defined
by Australian Professional and Ethical
Standards (APES) 225;
4. name of the provider of the service;
5. staffing, remuneration and billing
arrangements; and
6. general terms and conditions of business.
The letter of engagement will make clear
reference to the attached FSG.
Letters of engagement are normally
signed by the client/instructing solicitors
and a copy retained for safe keeping.
FINANCIAL SERVICES GUIDE
The Financial Services Guide will be
dated the same date as the letter of
engagement and edited in relation to the
remuneration arrangements to match the
arrangements for that engagement.
Remuneration arrangements are
commonly a fixed price or based upon
hours incurred at agreed hourly rates.
A copy of the Financial Services Guide
issued with the letter of engagement
will form an attachment to the report
containing the Opinion of Value.
VALUATION OPINIONS
With reference to s766B of the
Corporations Act, opinions of value may
be the provision of financial product
advice. Consequently, such valuation
opinions will append the FSG which was
issued together with the initial letter of
engagement.
Opinions of Value are usually prepared
without taking into account the personal
objectives, financial situation or needs of
any individual, including the recipient.
Therefore, such valuation opinions are
generally not personal advice but are
general advice. In view of that, valuation
reports should contain an appropriate
general advice warning, such as the
following:
GENERAL ADVICE WARNING
This Valuation Opinion has been
prepared without taking into account the
personal objectives, financial situation
or needs of any individual. Therefore,
the opinions expressed in this Valuation
Opinion are not personal advice but are
general advice. In view of that, before
acting on such advice, individuals should
consider the appropriateness of the advice
having regard to their own objectives,
financial situation and needs.
SIGNIFICANCE
The significance of these arrangements
is that Professional Standards Legislation
excludes services which require an AFSL.
Similarly, the professional indemnity
insurance cover commonly obtained
by accountants for services such as tax
and accounting and auditing generally
excludes cover for services which require
an AFSL. Hence, unless properly licenced,
accountants should generally not be
providing share and unit valuations to
persons other than the directors of the
companies and trusts which are the subject
of the valuation.
WARNING
This article contains general guidance
and is not to be relied upon by
readers without them taking their own
independent advice.
Hugh McPharlin is a partner of Nexia
Edwards Marshall and a Business Valuation
Specialist of Chartered Accountants Australia
and New Zealand. Nexia Edwards Marshall
Pty Ltd and Hugh McPharlin are Authorised
Representatives of Edwards Marshall Advisory
Pty Ltd which holds an AFSL to provide certain
services, including financial product advice to retail
and wholesale clients. B
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