Conflict of interest

What is a Conflict of Interest?

The Financial Advisory & Intermediary Services (FAIS) Act definition of a Conflict of Interest:

 

Any situation in which a Provider or a Representative has an actual or a potential interest that may, in rendering a financial service to a client

a) influence the objective performance of his, her or its obligations to that client; or

b) prevent a Provider or Representative from rendering an unbiased and fair financial service to that client, or from acting in the interests of that client

Including but not limited to:

i)  a financial interest

ii) an ownership interest

iii) any relationship with a third party.

 

Where can these potential conflict situations arise within Rodel Risk Solutions?

  1. With insurers with whom there is a business/ownership relationship
  2. With other FSPs with whom there is a business/ownership relationship
  3. With other distribution channels with whom there is a business/ownership relationship
  4. With any other persons with whom there is a business/ownership relationship
  5. With any service providers with whom there is a business/ownership relationship
  6. With our employees as a result of employment contracts and/or remuneration policies
  7. With any other relevant relationship that may exist within our company.

Who at Rodel Risk Solutions is affected by The Conflict of Interest Policy?

This policy applies to all employees, including:

  1. Directors
  2. Managers
  3. Permanent members of staff
  4. Contract and/or temporary staff, whether they be employed in the financial services sector or not.

How does Rodel Risk Solutions evaluate conflict situations?

Using specific management tools we document the number of relationships and relationships in our businesses parameters.  These are assessed to decide whether or not they create a conflict or potential conflict.

Where a conflict does arise or is bought to our attention, management make a decision on avoidance or mitigation and the decision recorded accordingly. These processes are monitored by our Compliance Officer and are part of an ongoing reporting strategy to ourselves and, if needed, to the Financial Services Board, who oversees the financial services sector.

 

How does Rodel Risk Solutions assess if a situation is conflicted?

An annual review of all business relationships are undertaking as wells as before any new business relationship is entered into.

The questions raised Rodel Risk Solutions include:

  1. What associate company relationships does Rodel Risk Solutions or our staff have? for example are there companies which there is a relationship based on common shareholding, management control or family members are involved and subsidiary of holding company status.
  2. What third party relationships do us or our staff have including:                                                                                                                                                                                                  
  • Product suppliers (insurers) and any of their associates;
  • Other FSPs including any of their associates;
  • Distribution channels;
  • Any other person or company who may have a financial interest in our specific sector or insurance e.g. Valuers and Auctioneers
  1. Is there any ownership interest within these relationships and could it create a conflict of interest?
  2. Has there (or will there be) any financial interest paid from or to these other parties within these relationships? If so could this create a conflict of in interest?
  3. Has there (or will there be) any immaterial financial interest paid from or to these other parties within these relationships, and if there is how is Rodel Risk Solutions monitoring the amounts and frequencies?
  4. What are our staff remuneration policies?

This practice allows us a holistic view of all of Rodel Risk Solutions relationships including those of our staff.  The data collected was then reviewed to see if a potential conflict had been identified and how best to deal with this.  Steps taken included:

  • Avoidance i.e. remove the situation that creates the conflict;
  • Mitigation i.e. put practices in place that recognise the conflict and implement measures to reduce its potential impact;
  • Disclosure i.e. provide full details of the conflict and what has (will) be done to reduce or eliminate the conflict

It is important to note that there could be a combination of all of the above three. However in most instances, Rodel Risk Solutions will choose to avoid a conflicted situation by removing it.

Where we could not avoid the conflict situation, actual or potential, it needed to be mitigated i.e. we had to put controls in place to reduce the likelihood of a conflict arising.

If a disclosure of conflicts, including potential ones, involves or involved clients a higher standard of formality is or will be adopted. Disclosure in writing must or will take place as soon as possible.

 

Rodel Risks Solutions’ disclosures are clear, concise and in plain English and include: 

  1. What conflicts there are or may be;
  2. What measures have been taken or will be taken to avoid or mitigate the conflicts;
  3. Any ownership interests that may become due to Rodel Risk Solutions including shareholding and/ or dividends, profit shares and similar payments. This includes ownership of and payments from associated companies that can include administrators, cell captives and insurers;
  4. Items we normally pay for i.e. financial interests which maybe made available by other providers (FSPs or insurers) that at a later stage may become due, examples of these would be vouchers, benefits, travel, hospitality, accommodation, sponsorships and other incentives;
  5. Any details of the relationships and/or arrangements that exist that create the potential conflict;
  6. How to obtain our conflict of Interest Management Policy.

How does Rodel Risk ensure compliance with our Conflict of Interest Policy and by all those involved?

  1. Our Conflict of Interest Policy is part of our formal staff training and part of our employment contract
  2. Any staff breaches of the policy are considered a breach of company policy
  3. Clients can obtain a copy from our Website as well as on request.
  4. This policy is reviewed regularly by Management and Compliance Officer, who have an obligation to report non-compliance if corrective action is not taken.
  5. The Conflict of Interest Policy is discussed as a standing item on the Board’s agenda.