Conflicts of Interest

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 when 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.

Outside Activities

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. Outside activities may create competing interests with advisors’ obligations to clients, such as receiving higher compensation from the products or services.

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 advisors' outside activities, nor do we assume any liability in connection with them.

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 person, company, or organization providing it.

Prohibited Conflicts of Interest

Securities regulations don’t allow advisors to have discretionary authority over a client’s account or financial affairs, to accept a power of attorney from clients, or to be an executor or trustee for a client, except for certain close family members. Such arrangements could allow advisors to favour their own interests over the interests of the client. If you need the services of an executor or trustee, your advisor can refer you to a trust company whose professional staff provide those services.

Securities regulations do not allow an advisor to deal in or advise about securities outside Belay since Belay would not be able to supervise those activities.

Advisors are not allowed to borrow money from clients or lend money to clients under any circumstances, either directly or indirectly. Belay and advisors cannot accept cash from clients under any circumstances.

Other personal financial dealings between advisors and clients could allow an advisor to favour their own interests over the client’s interests and are therefore generally prohibited.

Sales Practices and Compensation

Sales contests, sales quotas, and sales targets may lead advisors to make recommendations based on the contest, quota, or target even if the recommendation isn’t in a client’s interests.

Belay doesn’t hold sales contests and doesn’t set sales targets or quotas for advisors. We don’t require or encourage advisors to recommend any particular investment over another. We provide mutual funds from a wide range of fund managers to ensure there is a reasonable range of alternatives and fee structures available to 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 may receive offers of gifts or entertainment which could be perceived to influence their recommendations.

Belay has policies and procedures to limit gifts and entertainment, including that advisors may not accept gifts or entertainment with a value above what we consider to be consistent with reasonable business practices or that are disallowed by applicable laws. We set maximum levels for permitted gifts and entertainment to avoid any perception that they may influence recommendations or decisions.

Referral Arrangements

Belay may have referral arrangements with other parties to provide products or services to our clients that we don’t offer. For example, your advisor may refer you to a portfolio manager if discretionary account management by the portfolio manager may be in your best interest. We normally receive a fee from the other party for a client referral. There is a risk that the referral party is unqualified or that the fee creates an undue incentive to make the referral.

Before making a referral, we will ensure that the other party has the appropriate qualifications and licensing to perform the service and that the referral fee is reasonable. Referral arrangements operate pursuant to a written agreement between Belay and the referral party and comply with strict regulatory requirements. You will receive written disclosure with prescribed information about the referral arrangement when a referral is made, including the terms of any referral fees.