3. CONFLICT MANAGEMENT PLAN
Overview
Our conflict management process ensures that our clients will not be disadvantaged by any conflicts of interest that arise in relation to our credit activities (whether that possible conflict may arise wholly or partly in relation to credit activities engaged in by the licensee or its representatives). The Conflict management Plan will be reviewed quarterly to ensure that the documentation reflects the current status and appropriately describes how the client will not be disadvantaged.
We follow defined compliance procedures when providing credit assistance that ensure clients are not being disadvantaged.
- Capturing the requirements and objectives of the consumer and matching the most appropriate product to their needs regardless of any commission, benefit, interest, remuneration or accreditation requirement.
- Consumers are provided with access to a range of products throughout the process and are provided with appropriate comparisons reports that evaluate the features and benefits of each product with respect to the consumers objectives and financial situation.
- The list of credit options / products that are presented and discussed throughout the process are sufficiently comprehensive to ensure that the I have provided adequate arrangements. The products evaluated will be a reasonable representation of the credit options that are appropriate for the consumers objectives and financial situation.
- Consumers are able to make choices with respect to the lender and product utilised (based on the range of lenders that I am accredited with), irrespective of any commission, benefit, interest, remuneration or accreditation hurdle.
- Products will be well researched, evaluated and presented with respect to the clients requirements around the loan costs, charges and relevant policy that relates to their situation.
- A Preliminary Credit Assessment is always conducted to evaluate the options in accordance with their requirements and objectives. This document may also be utilised to acknowledge agreement on the credit assistance process, ensuring that the customer is not disadvantaged by any conflict of interest.
Disclosures to consumers
In addition to the credit assistance process been defined above, numerous disclosures are made to the client to provide transparency with potential conflicts of interests. Where conflicts may exist, an explanation is provided to inform the customer of the specific interest.
Higher commissions
On occasions some finance sources offer higher commissions than others. In these circumstances we disclose the fact of a possible higher commission to the consumer and obtain their consent to proceed. We always ensure that the consumer is not disadvantaged if we receive the higher commission.
Referrals
Where referral arrangements are in place with real estate agents, accountants, solicitors, conveyancers, financial planners and any other organisation that makes referrals to us that are incidental to their business, we will have designated referral processes in place to ensure that referrers are aware of their obligations (See Section 18 of this manual for signed referrer acknowledgements).
Part of this process ensures that full disclosure is made to the client with respect to remuneration and obligations.
Interests in Financial institutions or mortgage manager
From time to time, we may arrange a loan with a Financial Institution or Mortgage manager where we have a direct or indirect interest via share ownership. This interest will be disclosed to the consumer, even though it is extremely unlikely that any lodgements with those lenders would result in any significant benefit through rewards or dividends.
Volume Hurdles
Some lenders may require me to submit a certain number of loans to them per month in order to retain my accreditation with them. This conflict is disclosed to consumers, and, irrespective of the lenders that use volume targets, our customers are provided with a range of lender and product choices to meet the requirements and objectives. If a product proposed is one from a lender who sets volume targets, it would only be due to the product and lender parameters meeting the clients requirements and financial objectives.
Volume bonuses
From time to time, my aggregator (AFG) is able to negotiate volume bonuses with lenders. If that occurs, we may receive a portion of that bonus. If we are aware of any possible bonuses, this will be disclosed to the consumer. More importantly, the credit options that are presented throughout the process are sufficiently comprehensive to ensure thatwehave provided adequate arrangements and provided a range of choices. In any event, the volume of loanswesubmit would be unlikely to influence the total volume required to achieve that bonus.
Wealth Management / Budget coaching services
From time to time,wemay inform customers of budget coaching services / wealth management services of associates. The seminars that we inform customers about are obligation free. If any costs are associated with the seminar, they are disclosed up front and any remuneration that we may receive will also be disclosed in accordance with the referral processes outlines in the regulations.
Any conflict that is similar in nature to the circumstances above will be disclosed in the Credit Guide (which will be provided to the consumer when it appears likely that they will engage my services – from 1/1/2011).
geoffrey thomas mckenna
abn 73 732 994 243
132 WINGROVE street • fairfield • 3078
mobile: 0405 447 131
Phone: 03 9443 0083 • Fax: 03 9443 0042