Introduction

Under current regulations firms must establish policies and procedures to identify and prevent conflicts that could adversely affect a client’s interests.

• FCA Principle 1 requires a firm to conduct its business with integrity.
• FCA Principle 6 requires that a firm must pay due regard to the interests of its clients and treat them fairly.
• FCA Principle 8 requires a firm to manage conflicts of interest fairly, both between itself and its clients and between a client and another client.

In the course of business, circumstances may arise whereby the interests of a client conflicts with:

• The firm’s interests.
• The interests of member(s) of staff.
• The interests of another client.

We are committed to treating our clients fairly and follow the principles of the regulations as indicated above. We avoid putting ourselves in a position whereby our own interests, or our duty to any persons for whom we are acting, conflicts with our duty to a client where it is possible. However, we recognise that there may be instances whereby conflicts of interest are unavoidable. This Conflicts of Interest Policy has been designed to manage such situations, and to ensure that Redmayne Bentley’s clients are treated fairly.
 
NB. For the purpose of clarity, any reference in this document to employees includes franchisees, associates, staff, staff of franchisees and any business relationship under the umbrella of Redmayne Bentley.
 

What is a Conflict of Interest?

A conflict of interest is a situation where a firm or the individuals representing that firm have competing professional and/or personal interests which may result in behaviour that is not in the best interests of clients. A firm will inevitably encounter conflicts of interest between the firm and its clients and between different clients, e.g.:

• The firm holds knowledge in confidence for one client which would benefit another.
• Acting for one client may damage another.
• A firm and/or its employees may be remunerated in a way which encourages them to act against its client's interests.
• A firm’s employees may take advantage of client information.

These items are mainly applicable to firms with different group entities; Redmayne Bentley does not have a corporate finance division, nor does it conduct trades for its own account and it does not conduct direct investment research. The only assets held on behalf of the firm are within error accounts which are only used to correct any errors that may arise in the course of transacting business for clients.

Where do Conflicts of Interest Arise?
Given Redmayne Bentley’s business model, the following are examples of the types of situation that might give rise to conflicts of interest:

• Remuneration Schemes - Incentive schemes that might encourage Redmayne Bentley employees to advise/undertake transactions irrespective of suitability, or to favour one investment solution over other more suitable ones; incentive schemes that might encourage Redmayne Bentley staff to reject complaints or to pay as little compensation out as possible on upheld complaints irrespective of whether clients are being treated fairly.
• Commission - Commission arrangements that encourage Redmayne Bentley employees to advise or transact greater levels of turnover irrespective of the client’s best interests.
• Advice Recommendations – Commercial arrangements with providers that influence inappropriately the recommendations made through its advisory service.
• Discretionary Bonus Scheme - Discretionary Bonus schemes that encourage Redmayne Bentley employees to reject compensation claims or to pay out as little as possible irrespective of whether clients are being treated fairly.
• Gifts and Other Inducements – Gifts, entertainment, hospitality and other inducements from clients could influence the firm’s Directors and employees to do business for that client ahead of another irrespective of clients’ best interests.
• Close Links - ‘Close links’ with other firms that may influence Redmayne Bentley’s decision to do business with one intermediary or one supplier over another, irrespective of clients’ best interests.
• Business Strategy - Senior management’s desire to maximise net profits may be incompatible with their responsibility to ensure that clients are treated fairly at all times.
• Personal Relationships - Personal relationships with clients that influence employees to prioritise one client’s interests or complaint over that of another.
• Directorships and Outside Business Interests - Directorships and positions of responsibility in other companies that influence Redmayne Bentley’s procurement and corporate partnership decisions irrespective of clients’ best interests.
• Financial Promotions - Where Financial Promotions are targeted at a selection of or a group of clients over another that may be in breach of the Treating Customers Fairly principles and outcomes.
• Research - Where research material is produced by Redmayne Bentley and a Director, employee or a member of their families may have positions in the security, including derivatives (such as options), in the companies referred to in the published research.
• Use of Non-Public Information – where Redmayne Bentley employees may make improper use of non-public information for personal gain ahead of the client’s best interests.
• Personal Account Dealing - Redmayne Bentley permits all Directors and employees to have their own accounts and to place stock transactions. A Discretionary or Advisory service executive could trade ahead of clients to their own benefit and to the detriment of their clients.

 

Managing and Mitigating Conflicts of Interest

Overall Approach

• If the Directors and employees of Redmayne Bentley have a relationship that gives rise to a conflict with the interests of any of its clients, it will not knowingly act for that client without taking reasonable steps to ensure the fair treatment of that client.
• The Directors and employees of Redmayne Bentley are required where possible to avoid any action which may involve a potential or actual conflict of interest with clients.
• To this end, the Directors and employees of Redmayne Bentley should not have any undisclosed, unapproved financial or other business relationships with suppliers, clients or competitors that might impair the independence of any judgement they may need to make on behalf of Redmayne Bentley or its clients.
• Directors and employees who manage or advise on client portfolios are subject to regular monitoring by supervisors and the Leeds-based Compliance department.
• Directors and employees who manage or advise on client portfolios are required to be qualified with an appropriate examination and are subject to the Training and Competence Policy.
• A financial promotion is prepared for sign-off along with evidence of the information utilised to prepare the communication. This is checked and evaluated by independent and suitably skilled individuals who are also responsible for confirming the information contained in that promotion.
• Directors and employees preparing research notes on financial promotions are subject to ongoing training and competence requirements and independent monitoring. Where there is considered to be a conflict or potential conflict, disclosures will be made on research documents. Redmayne Bentley monitors trading activity on investments which have been the subject of research articles by employees to ensure there has been no conflict of interest with clients’ investments.
• Details of the Conflicts of Interest Policy are included in the Employee’s Code of Conduct.

Reporting of Conflicts of Interest

• Duty to Report Conflicts of Interest - Redmayne Bentley Directors and employees are expected to report conflicts or potential conflicts of interest to the Director of Regulation immediately upon identification. These are assessed by the Director and logged in a Conflicts of Interest Register. Guidance on how to proceed will be provided.
• How to Report Conflicts of Interest - Conflicts of interest are to be reported to the Compliance department by way of a written note and, where it relates to a special interest, this is to be advised by completing a Special Interest or Knowledge Form and submitting it to the Compliance department.

Monitoring of Conflicts of Interest
All Directors and employees will complete a Personal Account dealing notice which includes details of how to manage personal account transactions. Personal account transactions are independently authorised in accordance with internal rules and are monitored by the Compliance department. The monitoring also seeks to identify if any personal account dealing has created any conflicts when dealing ahead of clients, or if transactions have not been booked to a client account in a timely manner.

Directors and employees are required to comply with the policy of independence and to have signed an undertaking to that effect.

Systems and Controls for Preventing, Managing and Mitigating Conflicts of Interest
In addition to the above, Redmayne Bentley has a number of systems and controls in place to prevent conflicts of interest arising or to manage/ mitigate any that do arise. Senior management are responsible for identifying the systems and controls appropriate to the business model and for ensuring that those systems and controls are put in place.

Redmayne Bentley has adopted a three-stage approach to managing conflicts of interest that may arise:

1. Policy of Independence - All Redmayne Bentley’s Directors and employees are required to comply with the policy of independence. Adherence to the policy of independence will ensure that impartial advice is given or independent action is taken at all times. Adherence to the policy of independence may avoid the need to disclose material interests/conflict of interests in relation to a particular transaction or service. 

• When advising or acting on behalf of a client, Directors and employees must disregard any corporate or personal relationship, arrangement or interest that is likely to influence, in a manner material to the client, the advice given or action undertaken in relation to the transaction or service in question.
• Remuneration arrangements ensure that a balance is maintained between achievement of trading volume or profitability, quality of performance, adherence to compliance requirements and acting in accordance with the firm’s values and behaviours.
• Complaints handling procedures are in place and all complaints are referred to the Compliance department for independent monitoring/evaluation and to take an overview or make a ruling.
• Disclosure statements in letters and contract notes make it clear to clients the scope of the service being provided.
• Processes are in place to enable disclosure of commission received to clients. Details are available on the website and annual costs disclosures are made to clients in line with FCA regulations.
• Information on claims and complaints are assessed by Compliance with relevant information provided to Directors to identify any potential conflicts of interest.
• A Gifts and Conflicts of Interest Register is maintained by the Compliance department and regularly monitored to ensure inducements and other conflicts of interest do not influence procurement and strategic decisions.
• Actual/potential conflicts of interest must be reported to the Head of Regulation and the employee concerned must step back from any related decision making (see previous section).
• An order execution policy is applied to all client trading orders; a full copy of the policy is available on request or can be found at www.redmayne.co.uk/orderexecution. ​This is designed to consistently allow the best outcome for a client given the size and nature of the order. Adherence to this policy is monitored daily.

2. Disclosure - If the Directors or employees identify any relationships or interests that may give rise to a conflict with the interests of its clients, the firm will give due consideration to disclosing that conflict of interest before acting for that client. Redmayne Bentley will ensure that the disclosure is fair and not misleading and contains sufficient detail to enable the client to make an informed decision as to how the conflict may affect the service being provided. Redmayne Bentley will not enter into any transaction with or for a client if it has reason to believe that the client has objected to the conflict of interest.

3. Declining to Act for a Client - If Redmayne Bentley decides that a conflict of interest cannot be managed effectively by disclosing the conflict of interest to the client or by the policy of independence, the firm will give due consideration to declining to act for that client.
 

Special Interest Records

Financial Conduct Authority requirements make it necessary for Redmayne Bentley to maintain a register of firms in which staff/personnel have a special interest or knowledge. This information assists in showing that Redmayne Bentley is managing any conflicts of interest fairly and paying due regard to client interests.

Special interest or knowledge may arise in a number of ways; e.g. where an individual:

• Is related to a person employed in a position where they have confidential knowledge of a firm.
• Has made a visit to a firm.
• Has had conversations or discussions with a person of knowledge or influence in connection with a firm.

The Compliance department may use this information when monitoring personal account transactions and/or those of an executive’s clients (particularly discretionary); and may also need the details to respond in a timely manner to any FCA enquiries.

Anyone with special interest or knowledge of any kind is required to:

• Report it to the Head of Regulation and either their Head of Office or department head.
• Keep a record of meetings, telephone conversations and all other sources of information.
• Inform the Compliance department before advising or making a discretionary decision, in relation to a purchase or a sale in that firm; and send a copy of any note/letter to the Compliance department.
• Send copies of relevant announcements regarding that firm to the Compliance department.
• Take care when trading in a firm during a ‘closed period’. It is the client’s responsibility to know the relevant closed periods.
• Where Redmayne Bentley produces material of a research nature this will be disclosed on the literature in a way which is clear, fair and not misleading. Authors of such material are subject to transaction monitoring on the stocks covered in the article.

Last Updated: September 2021