CONFLICT OF INTEREST POLICY

 

This conflict of interest policy is owned by Spectre Wealth (Pty) Ltd (“Spectre Wealth”) a duly authorised financial service provider, FSP Number: 40845.

OBJECTIVES

Spectre Wealth is a financial services provider, providing to its client’s advice and intermediary services on long term insurance products only. Like all other FSP’s, the FSP is potentially exposed to conflicts of interest in relation to various activities. However, the protection of our client’s interests is my primary concern and so my policy sets out how:

  • I will identify circumstances which may give rise to actual or potential conflicts of interests entailing a material risk of damage to my clients’ interest;
  • I have established appropriate structures and systems to manage those conflicts; and
  • I will maintain systems in an effort to prevent damage to my client’s interests through identified conflicts of interest.

The FSP strives towards ensuring that it is able to appropriately and effectively identify and manage potential conflicts. It may manage potential conflicts through avoidance, establishing confidentiality barriers and by providing appropriate disclosure of the conflict of interest to affected clients. This will include the actual avoidance of partaking in competitions, product launches and incentive schemes, etc.

IDENTIFICATION OF CONFLICT OF INTEREST

In determining whether there is or may be a conflict of interest to which the policy applies, the FSP considers whether there is a material risk of damage to the client, taking into account whether theFSP or KI himself/herself, or an associate-

  • Is likely to make a financial gain, or avoid a financial loss, at the expense of the client;
  • Has an interest in the outcome of a service of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome;
  • Has a financial or other incentive to favour the interest of another client, group or clients or any other third party, over the interest of that client;
  • Receives or will receive from a person other than the client, an inducement in relation to a service provided to the client in the form of monies, goods or services, other than the legislated commission or reasonable fee for that service;

My policy defines possible conflicts of interest as, Inter alia;

  • Conflicts of interest between the FSP and the client;
  • Conflicts of interest between our clients if I am acting for different clients and the different interests conflict materially;
  • Conflict of interest where associates, product suppliers, distribution channels or any other third party is involved in the rendering of a financial service to a client;
  • Holding confidential information on clients which, if I could disclose or use, would affect the advice or services provided to clients.

MANAGEMENT OF CONFLICT OF INTEREST

Specific monetary measures are focussed on:

  • The FSP may only receive commission authorised in terms of applicable legislation;
  • Fees authorised in terms of applicable legislation, or fees or remuneration for services rendered to a third party, if those fees are reasonably commensurate to the services being rendered; (Basic Policy Fee declared to all clients);
  • A limited immaterial financial interest as defined; (Will be declared in the Non-cash Incentive register once it was approved by the Key Individual).

We will not offer any financial interest to any representative for-

  • Giving preference to the quantity of business for the provider to the exclusion of quality service;
  • Giving preference to a specific product provider where more than one product provider can be recommended;
  • Giving preference to a specific product of a product provider where more than one product may be recommended. Our representatives will be remunerated on a fixed salary basis and potential increases will be based on growth in new business.

The measures the FSP have adopted to manage identified conflicts are further summarised below. We consider them appropriate to our efforts to take reasonable care that, in relation to each identified potential conflict of interest, we act impartially to avoid a material risk of harming client’s interest.

  1. Procedures:

We have adopted appropriate procedures throughout our business to manage potential conflict of interest. Our representatives and employees will receive guidance and training in these procedures and they are subject to monitoring and review processes.

  1. Confidentiality Barriers:

Our representatives, associates and employees will respect the confidentiality of client information and disclose or use it with circumspect. No such information may be disclosed to a third party without the written consent of a client.

  1. Monitoring:

The Operations Director, who will be in charge of supervision and monitoring of the policy will regularly provide feedback on all related matters. The policy will be reviewed annually.

  1. Disclosure:

Where there is no other way of managing a conflict, or where the measures in place do not sufficiently protect client’s interests, the conflict must be disclosed to allow clients to make an informed decision on whether to continue using our service in the situation concerned. In all cases, where appropriate and where determinable, the monetary value of non-cash inducements will be disclosed to clients. There is no conflict of interest that we are aware of between any client or the FSP and/or representative of FSP.

  1. Publication:

We will publish our conflict of interest management policy in appropriate media and ensure that it is easily accessible for public inspection at all reasonable times. The disclosure document was updated to disclose the existence of this policy and the actual policy is available as a hard copy as well as on email attachment.

  1. Report:

The compliance officer will include a report on the conflict of interest management policy in the annual compliance report submitted to the Registrar.

  1. Declining to Act:

We may decline to act for a client in cases where we believe the conflict of interest cannot be managed in any other way.

DISCLOSURE REQUIREMENTS

The FSP will make appropriate disclosures to third parties including clients, as part of its arrangement to manage conflicts of interest and as required in terms of sec 3(1)(c)(i) and (ii) of the General Code of Conduct for Financial Services Providers.  These disclosures will be done timely, prominently, specific and meaningful to the client and will occur before or when the financial service is provided to for the client to assess its affects, and will refer to the specific service to which the conflict relates.

It is furthermore acknowledged that:

  • Whilst a clearly identified conflict of interest will not necessarily cause the provision of financial advice to a client to be significantly compromised, it should nonetheless de disclosed to the client. The client must be afforded the opportunity to decide for himself whether the conflict of interest is significant and to what extent he will rely on the advice; and
  • Remuneration practises that place the interests of the FSP or its representatives in direct and significant conflict with those of the FSP’s clients, should be avoided, and not merely disclosed.( Remuneration on fixed salary only)
  • The FSP will at all times take measures to avoid, and if not possible, to minimise the effect of the conflict of interest.

What needs to be disclosed?

  • All ownership interests or financial interest, other than immaterial interest, that the provider or its representatives may be or become eligible for; i.e. free practise management services, accommodation and travel costs paid by a third party and accepted to attend conferences seminars or hunting trips, Sponsorships, Competitions,
  • Compensation / remuneration received from third parties for rendering advice or intermediary services;
  • Nature of any relationship or any arrangement with a third party in sufficient detail to a client to enable the client to understand the exact nature of the relationship or the arrangement and the conflict of interest,  such as the payment of software licences or provision of client management software, the use of a preferred service centre or differentiated service; preferred investment rates, rebates payable by a product supplier by virtue of a white labelling agreement;
  • To inform the client of the existence of this conflict of interest management policy and how it may be accessed.

The disclosure document has been amended to inform all clients of the existence of the policy and how it can be accessed.

PARTICULAR MANAGEMENT MEASURES

  • Identification of conflict of Interest:
    • create awareness and knowledge of applicable stipulations of the General Code of Conduct and relevant legislation relating to conflict of interest, through training and educational material;
  • Avoidance of conflict of Interest:
    • ensure understanding and adoption of conflict of interest policy and management measures by all employees, representatives and associates;
    • do regular inspections on all commissions, remunerations, fees and financial interest proposed or received in order to avoid non-compliance;
    • keep register of conflict of interest

Non-cash incentive register: All gifts, incentives, benefits etc must be approved by the Operations Director who will decide on whether or not to accept such incentives

  • The register will be maintained by the Operations Director. In terms of receivers, the register will be kept in relation to payments and benefits received by financial services providers in respect of themselves and their representatives;
  • The register will contain details of date, type of non-cash incentive/s or indirect benefit/s, value of benefit and the name of the giver and the receiver;
  • The register will be available for inspection on request by any person requesting it.  A copy of the register is to be provided within 7 days of written request;
  • The client is to be informed in writing at the commencement of the transaction of full details as to where and how the register may be obtained;
  • The register is to be updated on at least a monthly basis;
  • The Operations Director is the appointed designated person within the organisation whose duties will include monitoring adherence to the requirement to keep the register, updating the register and dealing with requests for the register;
  • The compliance officer will monitor and report on the maintenance of the register.

VIOLATION OF THE CONFLICT OF INTEREST POLICY

If there is reason to believe that an interested person has failed to disclose actual or possible conflict of interest, the Operations Director shall afford the person the opportunity to explain the alleged failure to disclose.

If after hearing the response of the interested person and making such further enquiries as may be warranted in the circumstances, she determines that the interested person has in fact failed to disclose an actual or possible conflict of interest, she shall take appropriate disciplinary and corrective action in terms of normal disciplinary and FAIS debarment procedures.

REVIEW OF THE CONFLICTS OF INTEREST POLICY

This policy will be –

  • Regularly reviewed, internally or by the compliance officer, and where necessary, updated to ensure that the arrangements remain adequate to identify, assess, evaluate and successfully control conflicts of interest; and
  • Overseen by the Operations Director who carries responsibility for the implementation, reviewing and updating process.

DECLARATION BY: Gansen Govender, Key Individual of Spectre Wealth (Pty) Ltd of FSP Number: 40845.

The Financial Services Provider will conduct its business honestly and ethically wherever we operate. We will constantly improve the quality of our services, products and operations and will create a reputation for honesty, fairness, respect, responsibility, integrity, trust and sound business judgment. No illegal or unethical conduct on the part of members, employees or affiliates is in the company’s best interest. LSR Insurance Brokers (Pty) Ltd, trading as Spectre Wealth (Pty) Ltd will not compromise its principles for long term advantage. The ethical performance of this company is the sum of the ethics of the woman who work here. Thus we are expected to adhere to high standards of personal integrity.

This policy has been accepted as part of the general risk management of the business and shall be reviewed annually by the key individual and compliance officer.

DEFINITIONS:

Conflict of Interest: Any situation in which a provider or a representative has an actual or potential interest that may, in rendering a financial service to a client:

  • Influence the objective performance of his, her or its obligations to that client; or
  • Prevent a provider or representative from rendering an unbiased and fair financial service, or from acting in the interest of that client,

Including, but not limited to –

  • A financial interest;
  • An ownership interest;
  • Any relationship with a third party;

Such conflict of interest may exist even if no unethical or improper act results from it. It can create an appearance of impropriety that can undermine confidence in a person, profession or system.

Interested Person: Any director, shareholder, member, trustee, partner, representative or employee of the FSP who has a direct or indirect financial interest as defined below

Associates: In relation to a natural person, means-

  • Wife, life partner, civil union partner;
  • A child (including stepchild, adopted child, child born out of wedlock);
  • A Parent or step parent;
  • Person legally responsible for managing affairs of the person;
  • A person who is the wife, life partner or civil union partner of the person mentioned in 1, to iv;
  • A partner of the person

And in terms of a legal person, means-

  • If company, a subsidiary, or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary;
  • A close corporation and any member thereof
  • Any other juristic person which would have been subsidiary or holding of the first mentioned juristic person;
  • Includes any trust controlled or administered by that person
  • Any juristic person where the governing body is accustomed to act in accordance with the directions or instructions of the person first-mentioned in this paragraph, and includes any trust controlled or administered by that person;

Financial Interest: means any cash, cash equivalent, voucher, gift, service, advantage, benefit, domestic or foreign travel, hospitality, accommodation sponsorship, or other valuable consideration, other than:

  • An ownership interest;
  • Training ( not exclusive to a selected group) on
  • Products and legal matters
  • General financial and industry information
  • Specialized technological systems of a third party without travel and accommodation associated with that training.

Immaterial Financial Interest: means any financial interest with a determinable monetary value (aggregate) not exceeding R1000 in any one calendar year from the same third party received by:

  • Provider who is a sole proprietor; or
  • A representatives of such provider for that representatives’ direct benefit
  • A provider, who for its benefit or that of some or all of its representatives, aggregates the immaterial financial interest paid to its representatives;

Provider: means an authorised financial services provider and includes a representative;

Ownership Interest: means –

  • Any equity pr proprietary interest, for which fair value was paid by the owner at the time of acquisition, other than equity or an proprietary interest held as an approved nominee on behalf of another person;
  • Includes any dividend, profit share or similar benefit derived from that equity or ownership interest;

Subsidiary: means a subsidiary as defines in the Companies act;

Third Party: means –

  • A product supplier;
  • Another product provider
  • An associate of a product supplier or a provider;
  • A distribution channel
  • Any person who in terms of an agreement or arrangement with a person referred to in paragraphs (a) to (d) above provides a financial interest to a provider or its representatives

Compensation: Any direct or indirect remuneration including any type of non-cash incentives such as gifts or favours that are substantial in nature;

Conflicts Committee: A committee consisting of one or more persons, appointed by the FSP that is responsible for the implementation and disclosure requirements as defined in this policy.