Conflicts of Interest Disclosure
It is important for clients to know about potential conflicts of interest when dealing with financial professionals. The information below reviews the material conflicts we believe you should know about and how we handle them in the management of your Belay account. Please contact your advisor if you have any questions.
What is a Conflict of Interest?
A conflict of interest exists when your interests and those of Belay or an advisor diverge or are incompatible. A conflict of interest may exist between you and:
- Belay or your advisor
- Other Belay clients
- A person or company with which we have a relationship
Managing Conflicts of Interest
Good business practices and securities regulations require firms to take reasonable steps to identify and manage conflicts in the best interest of clients. We have policies and procedures to manage conflicts, which include taking reasonable steps to identify them, informing you about them and how they might affect you, and how we manage them in your best interest.
- We seek to avoid or minimize conflicts of interest where reasonably possible.
- We avoid conflicts of interest that are prohibited by law and material conflicts of interest that we cannot effectively manage in your best interest.
- We control and manage acceptable conflicts of interest by physically separating different business functions, restricting the internal exchange of information, not having financial incentives for advisors to favour a product or service over another that may be more suitable, and setting up and testing our operational review and approval processes.
Related and Connected Issuers
Securities regulations specifically require dealers to disclose all related and connected issuers to clients. That is, you need to know whether there are ownership or other connections between a dealer and the mutual funds or other securities the dealer sells to you, and whether those relationships might affect the advice you receive.
Because Belay is independent, we have no related or connected issuers so we can make objective recommendations without worrying about what is best for some other company.
In some instances, we permit advisors to offer products or services that are unrelated to the business of Belay. These are generally referred to as “outside activities” and typically include the sale of life insurance, segregated funds, and GICs, or provision of professional services such as financial planning, tax return preparation, or accounting. Our policies and procedures require advisors to disclose outside activities to us and to obtain our approval before they engage in the outside activity. We consider potential conflicts as part of our approval process. We do not supervise or monitor advisors’ outside activities. We do, however, conduct periodic reviews of those activities to ensure compliance with our policies and securities regulations. We make no representations or warranties regarding, and we assume no liability in connection with, advisors’ outside activities.
Since advisors may also sell GICs through Belay, they will disclose to you at the time of the sale whether they are providing a GIC through Belay or as an outside activity.
Your advisor will provide an outside activity disclosure to you about their outside activities, including a description of the product or service and the company or organization that provides it.
Prohibited Conflicts of Interest
Advisors are not allowed to have discretionary authority over a client’s account or financial affairs, except for certain close family members. In particular, securities regulations don’t allow advisor to accept a power of attorney from clients or to act as an executor or trustee. If you need an executor or trustee, your advisor can refer you to a trust company whose professional staff provide those services.
Advisors are not allowed borrow money from clients or lend money to clients under any circumstances, either directly or indirectly.
Securities regulations do not allow an advisor to sell securities outside Belay.
Other personal financial dealings between advisors and clients are generally prohibited.
Sales Practices and Compensation
Belay does not encourage advisors to recommend any particular investment over another. We do not set sales targets or quotas for advisors. We provide mutual funds from a wide range of fund managers to ensure there is a reasonable range of alternatives and fee structures for our clients.
We have systems and procedures to ensure that fees in fee-based accounts are not charged on mutual funds that pay that compensation to Belay. Fee-based accounts, which allow the fee to be negotiated between you and your advisor, are limited to a fee range that we believe to be reasonable.
Gifts and Entertainment
Advisors are not permitted to accept gifts or entertainment that are not allowed by applicable laws or that are beyond what we consider to be consistent with reasonable business practices. We set maximum levels for permitted gifts and entertainment to avoid any perception that they may influence recommendations or decisions.
Belay may have referral arrangements with other parties to provide products or services to our clients where we either receive or pay a fee for the client being referred to or from that other party. For example, your advisor will refer you to a portfolio manager if he or she determines that it is in your best interest for your investments to be managed on a discretionary basis by a portfolio manager. The portfolio manager will pay us a fee for the referral. You will receive written disclosure with prescribed information about the referral arrangement when a referral is made.