Name: John Rae

In accordance with the provisions of the Securities Markets Act 1988 and the Securities Markets (Investment Advisers and Brokers) Regulations 2007 this Disclosure Statement provides you with information and answers to questions about me. It provides details about:

the services I can provide;
how I operate my business;
my qualifications as an investment adviser;
what investment products I am able to sell you;
which financial organisations I am able to place business with; and
how I am remunerated.

This document was prepared on 3rd March 2008 Version 1

Adviser Details:

Name: John Rae, JRI Ltd
Address: PO Box 4234, 177 Courtenay St, New Plymouth
Phone: 06 758 8440 or 0800 RING JR
Fax/Email: 06 758 6625 or 0800 800 450
john@johnrae.co.nz

I am the owner of JRI Insurance.

EXPERIENCE

Since 1977 I have predominantly been involved in Life Insurance products as well as several different Savings products being available from our preferred insurance company.

These products are Term Life, Living Assurance, Medical Insurance, Income Replacement, Total & Permanent Disability Insurance, Group Life, TPD and Medical Insurance.

We provide insurance solutions for Shareholder Protection, Partnerships, Key Person, Business Overheads, Locum Cover and Loan Protection, Mortgage Protection and Family Protection.

Savings products sold since 1977 include Endowment, Landmark, Classic Retirement, Asset Architect, and Term Deposits via an insurance bond. The only savings product we use as of 3rd March 2008 is Sovereign’s Select Investor and First Choice KiwiSaver.

HOW WE OPERATE

When we give advice we follow the internationally recognised six-step process:

1.Establishing the client-adviser relationship,
2.Gathering client data and determining your goals and expectations,
3.Analysing and evaluating the client's financial position, cash and debt management, personal and business insurance, retirement planning and/or investment needs. This process will usually incorporate minor estate planning, namely issue identification, but not advice on solutions.
4.Developing and presenting our written advice when required,
5.Overseeing the implementation of the plan, and
6.Monitoring and reviewing the plan.

Not all clients require the full range of advice that can be provided, and the services we provide will depend on the client needs. If a client wishes to obtain limited advice or product implementation in any respect I will provide it, however it will be documented that the advice or transaction was limited in nature. Any recommendations will be clear and concise, with enough detail for you to make an informed decision about whether to act upon it.

PROFESSIONAL RELATIONSHIPS

I am able to recommend or place business with the financial institutions in New Zealand listed:

Risk Products

AXA
Asteron
AIG
Fidelity Life
Sovereign
Tower Life & Health
ING

I also have relationships with Prospero, which is a managing agency that provides access to write business with companies listed as well as aggregates the production of myself and other advisers in return for higher bonus commissions.

PROFESSIONAL ASSOCIATION

I am a member of the PAA and, as a condition of my membership I adhere to the IFA Code of Ethics and PAA Practice Standards in all facets of my practice.

I am also a member of MDRT and a life member.

QUALIFICATIONS

I have passed the Disability Income Insurance exam and attend Sovereign Insurance product accreditation training.

With over thirty years in Life Insurance and twenty plus years working in General Insurance we have built a wealth of knowledge in area’s relating to the industry.

I have purchased commercial property and own commercial property which allows myself to offer advice in this area. We have relationships with several key people in the commercial property sector and can and do refer our clients to other professionals when the need requires.

AREAS OF ADVICE

Subject Areas

I provide advice in the following subject areas:
Debt Protection
Business/Shareholder buy out insurance
Family Protection
All aspects of Risk Management using life insurance products
Mortgage Brokering (using JRI Mortgage Broker)
Investment Advice (using Sovereign Select Wealth Management)

The advice we provide has been gained from over thirty years in the insurance industry.

During this time the risk products sold have provided millions of dollars in claims paid. These payments have fulfilled the needs of the people receiving the benefit in many cases allowing families to remain in the homes after the death of a spouse.

Products

The products I would generally use (but are not limited to) are:

Life Insurance
Trauma Insurance
Disability Insurance
Health Insurance
Trusts and Bonds
Unit trusts
Life Savings Plans
Superannuation,
KiwiSaver
Capital Guaranteed and/or hedged investments

REMUNERATION

The basis on which I am remunerated is set out below:

1.For insurance business I receive commissions for placement of business with companies for clients. This commission usually is in the form of an initial commission determined by the premium being paid, a bonus commission depending on the total volume of business done with that supplier in the course of a financial year, and renewal commission payable annually for every year the policy is in force. The rates of commission vary from company to company, and product to product, and I can disclose any such commission to you following product recommendation if you request.
2.I may receive brokerage on investment products for placement of the business. That is, when a client invests in a recommended product I may receive a commission for that placement. I may also receive a trail commission for ongoing management of the investment or portfolio, which is typically a small percentage of the fund balance each year. As a general principle I rebate most of the initial brokerage, but not the annual trail commission. I will disclose precisely what the commissions or fees are on any investment product recommended prior to implementation.
3.I may charge a fee for time or services tendered. If a fee basis is required by a client then that fee basis will be agreed to prior to engaging in the advice process. If a fee basis is requested then all initial investment brokerage will be rebated to the client in full.
4.In addition, I often receive benefits from companies I recommend in the form of entertainment (eg. occasional tickets to rugby matches, concerts, golf days etc.), or office supplies (eg. notepads, pens, diaries etc), or subsidised professional development (eg. below actual cost conference attendance, fee-subsidised training courses, etc). The value of these things is often unknown to me, or predictable. Subsidised stationery would typically be under $100 pa in actual value, subsided professional development typically under $500 pa and entertainment typically between $500-$1,000 pa.
5.From time to time most of the product providers that I deal with run competitions and other incentive schemes based on the volume of business I give them. Prizes and other benefits offered by these product providers include proprietary software, attendance at industry conferences both here and overseas, travel benefits and other similar incentives.

PROFESSIONAL INDEMNITY INSURANCE

In compliance with the Institute of Financial Advisers Code of Ethics, I have professional indemnity insurance which covers all my areas of practice as listed above.

This insurance provides protection for clients for up to $2,000,000 pa for:

any error or omission;
defamation;
employee dishonesty; and
includes full "prior acts" protection.

The minimum level of cover is in compliance with Sovereign New Zealand and the PAA.

The underwriter is Lumley General Insurance, and it is renewed annually. I have not had any claims under this insurance in my career.

DISPUTE RESOLUTION

In the first instance you can direct any complaints to the product supplier company involved, as each of them has an internal complaints handling process.

Alternatively, a dispute resolution facility is available by contacting The National Office, PAA (Professional Advisors’ Association Inc), PO Box 38 105, Wellington Mail Centre 5045. Should a complaint be lodged with the PAA then it will be recorded, referred to a Complaints Committee which will review the matter and determine the appropriate resolution, which may include referring the matter to the Disciplinary Committee. Full details of the complaints process can be obtained directly from the PAA.

You can also contact the Insurance and Savings Ombudsman.

DISCLOSURE OF CRIMINAL CONVICTIONS

I have not been:

convicted of an offence under the Securities Markets Act 1988; the Investment Advisers (Disclosure) Act 1996 or the Securities Act 1978, or for a crime involving dishonesty;
a director or principal officer of a body corporate that has committed an offence against the Securities Markets Act 1988, the Investment Advisers (Disclosure Act) 1996 or the Securities Act 1978 or for a crime involving dishonesty;
adjudged bankrupt;
prohibited by and Act or by a court from taking part in the management of a company or business;
the subject of an adverse finding by a court in any proceeding taken against me in my professional capacity; or
expelled from, or prohibited from being a member of, a professional body.

DISCLOSURE SOVNET

SovNet is an association of like minded financial advisor professionals who have chosen to form a business relationship with Sovereign, a market leading insurance and investment service provider. My membership of SovNet provides me with advantages such as advance product training, professional development, participation in peer group forums and industry information. These advantages allow me to better serve my clients and their unique needs.

Being a member of SovNet obliges me to place the majority of my customers business with Sovereign. However, it is not an exclusive arrangement and I am entitled to place a significant portion of my business with any provider of my choosing.

From time to time most of the product providers that I deal with run competitions and other incentive schemes based on the volume of business I give them. Prizes and other benefits offered by these product providers include proprietary software, attendance at industry conferences both here and overseas, travel benefits and other similar incentives.