As a financial services provider Frank Financial Services (Pty) Ltd (FFS) needs to take all necessary steps to guard against any practices and/or services that could create a conflict between their interests and the interests of an existing or potential customer.
A conflict of interest is any situation where FFS or their employees, including contact centre staff members, have an interest that might influence the objective performance of their obligations to a customer or where it prevents them providing an unbiased and fair financial service.
This could include receiving a wide range of financial and non-financial benefits, ownership interests based on the relationship or service provided for a third party.
Where it is not possible to avoid any act, action or benefit that might create a potential conflict of interest, steps must be taken to minimise the impact and it must be appropriately disclosed to the customer at the earliest reasonable opportunity.
This Policy details how any such conflicts of interests will be managed including:
- the controls in place to identify potential or actual conflicts,
- the controls for avoiding or where necessary the disclosure of conflicts of interest,
- processes and procedures for making sure this Policy is followed, and
- the consequences of not complying with the Policy.
The Policy also contains details of the types of financial interests an FFS representative receives and the basis on which it is received.
The Policy also contains a list of all associates of FFS and third parties in which FFS holds an ownership interest or that hold an ownership interest in FFS.
How we identify possible conflicts of interest
FFS has developed the following processes to identify conflicts of interest:
- An analysis of all customer -acing areas within FFS has taken place;
- The types of financial interests received/offered have been identified and analysed;
- Structures have been put in place around the receipt/offering of financial interests;
- All remuneration models for the employees are reviewed by the FFS leadership team.
- Remuneration for contact centre staff members is assessed against allowable fee structures;
- Appropriate training has been developed to enable employees to identify any potential or actual conflict of interest situations.
Quarterly and annual reviews of these processes are included in FFS’s Risk and Compliance monitoring schedule to ensure that any conflicts of interest that arise are identified.
Avoiding and/or disclosing conflicts:
FFS’s provides specific training and educational material on how conflicts of interest may arise and how it can be avoided to all new employees. Training has also been provided to all existing employees.
Where a conflict of interest cannot be avoided, FFS’s consultants are required to disclosure the conflict to customers at the earliest reasonable opportunity, together with the steps taken to manage the situation.
Every existing and potential customer has the right to ask FFS employees for these disclosure details. A (potential) customer’s rights (or potential rights) and the protection offered under the Financial Advisory and Intermediary Services (FAIS) Act and related General Code of Conduct may not be waived.
All financial interests offered to/received from third parties are monitored as part of FFS’s overall Risk and Compliance Monitoring Programme.
Who is responsible for compliance?
FFS has adopted a governance process that requires the leadership team to ensure compliance with this Policy::
The ME is accountable for the implementation and compliance with this Policy within FFS.
The Compliance Officer is accountable for updating this Policy based on changing business practices and a changing regulatory environment.
They are also accountable for the monitoring of compliance with this Policy as a part of FFS’s Risk & Compliance Management Framework and for reporting any issues to management.
FFS’s appointed Key Individuals are accountable for ensuring compliance by the representatives listed on the representative register under their control as required by the FAIS Act.
Internal Audit is accountable for assurance to the board of directors on the adequacy and effectiveness of FFS’s internal and compliance controls relating to conflicts of interest.
Risk & Compliance Management Framework:
FFS has included conflict of interest monitoring in its Risk and Compliance Management Framework. The framework is reviewed annually.
Questions and complaints:
Existing and potential customers can also direct questions and complaints concerning the application of this Policy to firstname.lastname@example.org.
Consequences of non-compliance:
Any employee who fail to follow this policy will be dealt with in terms of FFS’s internal disciplinary procedures. In addition, contact centre staff members are also subject to the procedures applicable to representatives under the FAIS Act.
FFS’s policy is not to receive anything other than permitted distribution, support and administration fees.
Contact Centre Staff Members
FFS’s contact centre staff members are salaried employees who may also qualify for certain additional incentives and other benefits. These other benefits include certain non-cash prizes if specific business targets are met.
Before these incentives and other benefits are paid, FFS’s policy is to take the following quantity and quality measures into account:
- The volume of business generated by the staff member, measured by quantity and premium value.
- Persistence of the business written, measured by short- and long-term lapse rates.
- The quality of the service to the customer, measured by the Key Performance Indicators in the staff member’s Performance Agreement.
The volume of business generated by the consultant, measured by quantity and premium value.
Persistence of the business written, measured by short- and long-term lapse rates.
The quality of the service to the customer, measured by the Key Performance Indicators in the consultant’s Performance Agreement
List of associates and third parties in which FFS holds an ownership interest:
List of ownership interests in FRANK.NET:
The following third parties hold an ownership interest in Frank Financial Services (Pty) Ltd:
- Liberty Group Limited (100%)