Conflicts of Interest Disclosures

Eddy Wealth is registered as a Portfolio Manager whose principal regulator is the Ontario Securities Commission. Eddy Wealth is also registered with the Financial Services Regulatory Authority of Ontario (FSRA) as a provider of life and disability products for clients.

Securities legislation in Canada requires Eddy Wealth to make certain disclosures regarding conflicts of interest. This statement is to inform you of:

  • the nature of any conflict of interest that may be expected to arise
  • the potential impact and the risk that the conflict of interest could pose to a client
  • how the conflict of interest has, or will be, addressed

This statement applies to all divisions of Eddy Wealth.

Definition: Material Conflicts of Interests

A material conflict of interest exists:

  • if the interests of Eddy Wealth (or an individual acting on its behalf) and a client are inconsistent or divergent
  • in situations where Eddy Wealth (or an individual acting on its behalf) may be influenced to put their interests ahead of a client; or
  • monetary or non-monetary benefits available to a registrant, or potential detriments to which a registrant may be subject, may compromise the trust that a reasonable client has in their registrant

How the conflict of interest has, or will be, addressed

Conflicts of interest may be large enough to be material (in which case they are addressed as described in this document) or small enough to be immaterial (in which case no further action is taken to address them). In determining the materiality of a conflict of interest, Eddy Wealth will consider whether the conflict may be reasonably expected to affect the decisions of its client in a particular situation or the recommendations and/or decisions Eddy Wealth makes on behalf of its client.

Eddy Wealth addresses material conflicts of interest in the best interest of our clients. This is done by placing the interests of clients first, ahead of the personal interest of Eddy Wealth and any other competing considerations. As such, Eddy Wealth takes reasonable steps to identify, address and avoid any existing material conflicts of interest or foreseeable material conflicts of interest that we would reasonably expect to arise (i.e., between Eddy Wealth and a client and between each individual acting on our behalf and a client). Eddy Wealth determines the level of risk for each material conflict.

Eddy Wealth avoids situations that would result in a serious conflict of interest resulting in too high a risk for clients or market integrity and will ensure that it will act in the client’s best interest. In other circumstances involving a conflict of interest, Eddy Wealth takes the appropriate steps to control the conflict of interest. Similarly, if a particular conflict is capable of being addressed by using controls, but the specific controls being used by us are not sufficiently mitigating the effect of the conflict, we will avoid that conflict until we have implemented controls sufficient to address the conflict in the best interest of the client.

Individuals acting on behalf of Eddy Wealth also are required to identify potential conflicts of interest and bring them to the attention of Eddy Wealth, while also disclosing any relevant information that may arise in a potential conflict of interest to Eddy Wealth. If the individual is uncertain as to whether a potential conflict of interest exists or could arise, the matter should be directed to the Chief Compliance Officer for discussion. Any individual who identifies a potential conflict of interest will await approval from Eddy Wealth Chief Compliance Officer prior to acting on behalf of the client, to ensure that any actions taken on the client’s behalf are in their best interest.

Eddy Wealth takes proactive measures to anticipate reasonably foreseeable conflicts of interest, assesses the materiality of such conflicts to distinguish between those conflicts that are material and those that are not and has developed adequate procedures to identify existing conflicts.

The situations in which Eddy Wealth could be in a conflict of interest, and the way in which Eddy Wealth intends to respond to such conflicts, are described below.

Referral Arrangements – Eddy Wealth has in place referral arrangements whereby the referrer refers clients to Eddy Wealth for a fee. Details of the referral arrangement, including the fee paid by Eddy Wealth to the referrer are provided to each client being referred. Nature of the conflict: the referrer may refer clients to Eddy Wealth in situations that may not be in the client’s best interest. These situations may include higher fees and/or adverse tax consequences triggered by the movement of assets to Eddy Wealth. Eddy Wealth uses avoidance, control, and disclosure to deal with these conflicts. The Eddy Wealth advisor responsible for the referred client relationship will discuss these issues with the client and take appropriate action. If a resolution in the best interest of the client is not possible the referral is not accepted. The acceptance of all referred clients is subject to approval by Eddy Wealth Chief Compliance Officer.

Insurance registration – Eddy Wealth is registered with the Financial Services Regulatory Authority of Ontario (FSRA) as a provider of life and disability products for clients. Eddy Wealth and its advisors may receive commissions when these products are purchased by a client. These commissions may act as an incentive for a Eddy Wealth advisor to recommend an insurance product instead of an alternate investment solution, or in cases where a client may not have adequate financial resources to fund a particular insurance policy. To manage any potential conflict, we use a combination of avoidance, control and disclosure as follows:

  • Avoidance: investment products such as segregated funds with deferred sales charges would be avoided. Segregated funds would only be used for smaller accounts or when capital preservation or creditor protection is required.
  • Control: only no-load segregated funds with low MERs are allowed.
  • Disclosure: the potential for conflict will be disclosed to the client, verbally and in writing, before any insurance products are sold
  • All insurance policies sold to clients are subject to approval of the Chief Compliance Officer

Conflicts of Interest Relating to Eddy Wealth Personnel/Personal Trading – Eddy Wealth’s personnel may find themselves in situations where their personal interests are in conflict with those of a client.

Eddy Wealth’s Code of Ethics and related policies and procedures establish basic principles for employee conduct which, among other things, prohibit an employee from:

  • Using confidential information acquired in connection with his or her duties
  • Accepting gifts, entertainment and compensation that would influence decisions to be taken in the course of performing their duties
  • Engaging in activities that could interfere or conflict with their duties.

Eddy Wealth does not allow any of its personnel to engage in activities outside the scope of their duties, including serving as a director of a company or other entity, without first ensuring that such activities do not compromise the interests of Eddy Wealth’s clients.

When Eddy Wealth staff invest in the same securities as Eddy Wealth’s clients, there is a perceived or potential conflict of interest that the staff person may benefit from opportunities at the expense of Eddy Wealth’s clients. Eddy Wealth has a Code of Ethics that sets out standards for business conduct to prevent conflicts of interest and has established personal trading policies and procedures for employees, officers and directors who have access to information about client portfolios.

Fair Allocation Among Clients – Eddy Wealth is appointed to act as an advisor to many clients. It may aggregate orders for a number of client accounts for the purchase of a particular security. It may also rebalance client portfolios. Unfair allocation of trades by Eddy Wealth, and preferential treatment in the order of rebalancing are potential conflicts of interest. To avoid any potential conflicts of interest, Eddy Wealth has adopted trading policies designed to ensure fair allocation of securities among clients. A copy of Eddy Wealth’s fair allocation policy is provided to new clients before opening an account and thereafter when a significant change to the policy is made. A copy of this policy is available on request.

Other Conflicts of Interest – From time to time, other conflicts of interest may arise. Eddy Wealth will continue to take appropriate measures to identify and respond to such situations fairly and reasonably and in the best interests of its clients.