Conflicts of Interest Policy
In accordance with Corporations Act s912A(1)(aa) we are required to have in place a management policy in respect of identified material conflicts of interests in our provision of financial services to retail and wholesale clients. Lifespan has such a policy, which Representatives are required to read, and acknowledge that they have read.
A conflict of interest occurs when we provide recommendations to a client that is inconsistent with some or all of the interests of the client, in favour of the interests of Lifespan or the Representative, associates or other person. Examples may include an association with a product provider, co-branded (in-house) IDPS (Wrap account), soft dollar benefits paid by product providers, or getting paid an allowance for back office services. Even though new arrangements for conflicted remuneration are banned from 1 July 2013 and no new clients can be added to existing arrangements from 1 July 2014, conflicts of interest can still exist.
In performing our conflicts of interest obligations, we require Representatives to assist in identifying all potential, actual or apparent conflicts of interest on a regular basis and manage such conflicts appropriately.
Identifying Conflicts of Interest
1. Representatives are required to be knowledgeable with respect to what a conflict of interest is, how to identify it and how to manage it.
2. As Representatives may be transferring from another licensee, we are required to complete a statement disclosing any possible conflicts.
3. Lifespan keeps a register of all potential, apparent and actual conflicts of interest. This register is updated as required and forwarded to all Representatives when updated.
4. Representatives are also required to complete their own register, listing all arrangements they have in place with fund managers or other entities, as well as any potential, actual or apparent conflicts of interest. Any such arrangements must be disclosed and approved by Lifespan.
5. Lifespan requires Representatives to complete and return to Lifespan an updated register whenever changes are made. However, Representatives are required to report immediately to the General Manager any situation, real or perceived, which could be regarded as a conflict of interest.
Managing Conflicts of Interest
Once a conflict of interest has been identified and reported to Lifespan, Lifespan will recommend a suitable management policy. We are required to follow all Lifespan recommendations, which may include avoiding, disclosing or controlling the conflict of interest.
Disclosing Conflicts of Interest
Disclosing in detail in Lifespan’s Financial Services Guide (if known at the time the FSG is given to the client) and an oral explanation provided to the client at that time.
Disclosing in detail in a Statement of Advice including prominent and specific details of the conflict and be written in plain English. For example, if a representative was entitled to participate in a volume bonus reward of an overseas conference trip the disclosure will include how much income is required to be rewarded with the trip, conference destination, the length in days of the trip, the approximate value in monetary terms of the reward.