CONFLICTS OF INTEREST DISCLOSURE STATEMENT
In the context of our relationship with you, a conflict of interest occurs when ACPI’s or one of our Advisors’ interests are divergent or inconsistent with yours, or when circumstances exist where ACPI or your Advisor may have motivation to put their interests ahead of yours.
The following outlines our conflicts of interest management practices and is also designed to provide some guidance to you regarding conflict issues that may arise. In addition to ACPI’s objective to serve your financial goals in alignment with our business interests, Canada has comprehensive and extensive securities laws and regulations designed to protect client and investor interests, including provisions dealing with conflicts of interest.
In an effort to harmonize securities regulation across Canada, the individual provincial securities regulators, through the Canadian Securities Administrators (CSA), provide uniform regulation through a number of National Instruments. Part 13, Division 2 of National Instrument 31-103, which has recently been amended, speaks to the handling of conflicts of interest. In addition, ACPI is a member of the Investment Industry Regulatory Organization of Canada (IIROC), which is a self-regulatory organization for the securities industry in Canada. IIROC also has rules that its members must follow regarding conflicts of interest. For further information, we encourage you to visit the CSA’s website at https://www.securities-administrators.ca/ and IIROC’s website at https://www.iiroc.ca/.
IDENTIFYING & ADDRESSING CONFLICTS OF INTEREST
When a conflict of interest arises, we identify whether that conflict is a material conflict. A material conflict is one that would reasonably affect your decisions or, alternatively, our decisions or recommendations to you. In all instances where we are able to do so, we will disclose a material conflict of interest to you so that you may be fully informed of the conflict. In the rare instances where we may not be able to disclose a material conflict of interest to you, we will avoid the conflict by not engaging in the activity that gives rise to the conflict.
When disclosing a conflict of interest to you, we will be sure that the disclosure is prominent, full, detailed, and done in a timely fashion – so that you can assess the conflict and how we propose to address it for yourself.
Disclosure alone is generally not sufficient to resolve the conflict in your best interests. In addition to disclosing the conflict to you, we will take proactive measures to ensure that the conflict is resolved in your best interests. Depending upon the nature of the particular conflict, the measures that we take may vary from situation to situation. However, some potential measures that we may employ in certain circumstances include enhanced supervision of client accounts, use of a “fair allocation” policy, and alternative fee arrangements.
Below is a list of some existing and potential material conflicts of interest relating to the services we provide to you, and some of the controls we use to deal with those conflicts in your best interests:
OUR OWNERSHIP STRUCTURE
With a view to better serve our clients, in 2020 ACPI entered into an agreement with CI Financial Corp. (“CI”) whereby CI acquired a controlling interest of ACPI’s parent company, Aligned Capital Distribution Inc. As a part of this agreement, ACPI has remained completely independent in how it runs its day-to-day business and operates separate and distinct from other CI-controlled companies. This unique relationship allows ACPI to continue to serve you as we have all along, but with the added support of a global leader in the industry. Notwithstanding the fact that controls are in place to maintain ACPI’s independence, it is imperative that we disclose this affiliation with CI to you.
RELATIONSHIPS WITH RELATED OR CONNECTED ISSUERS
As noted in the section regarding our ownership structure above, CI has acquired a controlling interest in ACPI. This means that CI is a “related issuer” of ACPI within the meaning of applicable securities legislation. Further, affiliated companies of CI are also “connected issuers” of ACPI. For more information on these relationships, please see our Disclosure of Related Registrants (Affiliates), included as a part of our Relationship Disclosure Document.
From time to time, your ACPI Advisor may recommend securities of a connected or related issuer. However, we deal with this conflict by ensuring that your Advisor is not incentivized to recommend the product of a connected or related issuer over any other product. In addition to our disclosure to you of connected or related issuers, so that you may independently assess if the relationship is significant to you, we also ensure that your Advisor does not receive any additional compensation in connection with your purchase of products from a connected or related issuer. Moreover, your ACPI Advisor will review your accounts for suitability when a recommendation is provided to ensure that the recommended product is appropriate for you.
RELATIONSHIPS WITH OTHER ISSUERS
ACPI may have a variety of relationships with unrelated issuers who provide products to our clients. As a result, there may be a perception that ACPI may be motivated by these relationships (contractual or otherwise) to recommend the securities of these issuers. As a control, all products available to ACPI’s clients are reviewed on their merits by our Product Review Committee without regard to any potential relationship that the issuer may have with ACPI.
In general, ACPI does not offer proprietary products. The exception to this is our pooled investment funds that are available to some ACPI clients. The purpose of the pooled funds is to provide efficiency to an ACPI Advisor’s managed account practice while at the same time making available certain investment opportunities to clients that may not otherwise be available to them outside of the pooled funds. In addition to the clients of the ACPI Advisor that is the Portfolio Manager of a particular pooled investment fund, other ACPI clients may be eligible to invest in these pooled funds through ACPI’s unified managed account (“UMA”) platform, to which an access fee may apply. Any such fee is disclosed in writing to the client, so that you may determine if this is an appropriate service for you. You may inquire with your ACPI Advisor to see if this may be an option for you.
ACPI, as the Investment Fund Manager of the pooled funds, may receive fees relating to the management, administration, and/or performance of these funds. This conflict is addressed through clear disclosure of the applicable fees in the particular fund’s offering documents, as well as through a number of controls. These controls include ensuring that the investment mandate is in line with the objectives of each client invested in a pooled fund, requiring a business case that demonstrates how a particular fund would benefit the prospective clients prior to set-up, quarterly compliance reviews of each pooled investment fund, and, where appropriate, rebates of account fees to clients in the funds to ensure that they are not paying additional fees associated with their participation in the pooled fund investment.
SALES PRACTICES & ADVISOR COMPENSATION
ACPI retains a standardized portion of each Advisor’s commissions on a monthly basis. As a result of this structure, from the firm’s standpoint, there is no conflict with regard to Advisor compensation. However, because our Advisors retain all the commissions they earn less the standardized amount deducted, there is the potential for a conflict for ACPI Advisors who may receive increased compensation as a result of generating more commissions. ACPI addresses this conflict through enforcement of policies prohibiting sales for the purpose of commission generation, as well as daily supervision of trading practices and internal audit of Advisor sales practices by ACPI staff whose compensation is not tied to sales.
Some ACPI clients may have entered into fee-based account agreements whereby they pay a fee based upon the account value. These accounts may include securities that pay ACPI (and ultimately your ACPI Advisor) a trailing commission. ACPI has addressed this conflict by excluding such security from the fee-based account fee calculation.
OUTSIDE BUSINESS ACTIVITIES
ACPI prides itself on being an independent dealer and the opportunities that this provides to our Advisors. ACPI Advisors, after review and approval, are free to engage in a number of non-investment related outside business activities (“OBAs”) that are beyond the scope of their duties with ACPI. These OBAs may range from business that may compliment their investment practice with ACPI, to volunteer positions in their communities.
Clients are advised of their individual Advisor’s participation in these OBAs at account opening, and clearly notified that these activities are not provided by ACPI. In addition, ACPI monitors websites, social media, and information available to the public regarding these OBAs (where applicable) to ensure that there is no confusion or intermingling of ACPI business and OBA business. In rare circumstances where an Advisor’s involvement in an OBA may put them in a position of influence over a client, ACPI will take additional steps to mitigate the potential effects of this conflict to ensure that the conflict is resolved in your best interests.
ACPI may enter into agreements where we may earn a fee for referring your business or pay a fee for a referral of your business to us. In each such case, prior to you opening an account or receiving services under the referral agreement, you will be notified in writing of the referral. If we are referring you to another party for services, we will satisfy ourselves that the other party is qualified to provide those services to you. In addition, the disclosure that you will be provided will include: the name of each party to the referral agreement; the purpose of the agreement, including the services to be provided by each party to the agreement; any conflicts of interest that may arise form the agreement; the method of calculation of the referral fee, and to the extent possible, the amount of the referral fee; the category of registration of each registrant that is a party to the agreement with a description of the activities that the registrant is authorized to engage in under that category and, giving consideration to the nature of the referral, the activities that the registrant is not permitted to engage in; if a referral is made to a registrant (including us or our Advisors), a statement that all activity requiring registration resulting from the referral agreement will be provided by the registrant receiving the referral; and any other relevant information.
GIFTS AND ENTERTAINMENT
ACPI Advisors and employees may be offered gifts or entertainment from our business partners which could create or give the impression of a conflict of interest. To address this conflict, ACPI has a policy in place regarding the acceptance of such gifts, which includes a prohibition on high-value gifts, and approval of the acceptance of other gifts valued above a certain threshold.
Given the nature of our business and the services that we provide to you, there is the potential that our Advisors and employees could obtain material non-public information, including information about you and the holding in your accounts, to use for their own personal trading purposes. We have instituted policies to address this conflict, including policies relating to privacy and employee investment accounts (“PRO accounts”). We require most PRO accounts to be maintained with ACPI, to allow us to effectively monitor transactions in those accounts. For the PRO accounts that are not maintained with ACPI, we require the applicable Advisor or employee to disclose those accounts to us and have their financial institution forward copies of their monthly statements to ACPI for review.
|Fairly and effectively dealing with conflicts of interest is one of our core values. Further information on how we deal with conflicts of interest can be obtained from your Advisor on request. Alternatively, you may email us at email@example.com for further information.|
Aligned Capital Partners Inc. (“ACPI”) values your business and we thank you for your confidence in choosing our firm as your source of advice and products. As our client, you trust us with your personal information. We respect that trust and want you to be aware of our commitment to protect the information you share in the course of doing business with us. As an organization that collects, uses and discloses personal information, ACPI is subject to the federal Personal Information Protection and Electronic Document Act (or by similar laws in the provinces of Alberta, British Columbia and Quebec). In complying with these laws, it is important that ACPI provide you with information so that you may fully understand the purposes for which your personal information is collected.
Your Rights as They Pertain to Your Personal Information
- You have the right to know why an organization collects, uses and/or discloses your personal information.
- You have the right to expect an organization to handle your information reasonably and not to use it for any purpose other than the one to which you consented.
- You have the right to know who in an organization is responsible for protecting your information.
- You have the right to expect an organization to protect your information from unauthorized disclosure.
- You have the right to inspect the information an organization holds about you and ensure it is accurate, complete and current.
- You have the right to expect an organization to destroy your information upon your request and when no longer required for the intended purpose.
- You have the right to confidentially complain to an organization about how it handles your information and to the Privacy Commissioner of Canada if necessary.
Your consent is required before we may provide your information to any third parties. The consent that you provide to ACPI with regard to collection, use and disclosure of your personal information may be cancelled at any time by providing written notice to ACPI (subject to legal or contractual obligations and on providing us with reasonable notice) by contacting our General Counsel and Chief Privacy Officer. Please be aware that the purposes for which we collect, use and disclose your personal information are central to our being able to provide you with our services. By withdrawing your consent, ACPI will no longer be in a position to provide you with requested products and services. Therefore, by maintaining your account with ACPI, you are providing consent to our collecting, using and disclosing your personal information, as set out in this agreement.
ACPI does not require your consent to the collection, use and disclosure of your personal information:
- Where such collection, use and disclosure is reasonably required in the normal course of providing service to your account;
- For the collection of a debt owed to ACPI by you;
- Where such information is provided to a law enforcement agency, securities regulatory authority, or SelfRegulatory Organization;
- Where such information is provided to legal counsel for the purpose of obtaining advice.
How We Collect, Use and Disclose Your Information
When you do business with us, we collect three types of information: personal, non-personal and anonymous. We will obtain personal information about you, which we will keep on file in accordance with industry regulations. Only authorized individuals and entities have access to this information. We assume your consent for our firm to use this information in an appropriate manner. We may use and disclose this information in order to:
- Identify you;
- Communicate with you in a timely and efficient manner;
- Provide you with products and services that best meet your needs;
- Assess your application for investment and other services available to you by our firm;
- Evaluate claims and underwriting risks when required;
- Detect and prevent fraud;
- Analyze business results;
- Act as required or authorized by law.
If you are an individual, ACPI may collect, use and disclose your Social Insurance Number (SIN) for income tax reporting purposes.
ACPI may, from time to time, disclose your personal information to external sources, such as credit agencies, other financial institutions, insurance companies, mutual fund companies in which you invest and other parties who provide services to ACPI. ACPI may also rely on external sources to collect personal information about you.
What We Will NOT Do With Your Information
ACPI does not disclose your information to any other organization to use for their own purposes. We do not sell client information to, or trade client information with anyone; nor do we share client information with organizations outside of our relationship with you that would use it to contact you about their own products or services.
Corrections of Personal Information by ACPI
You may review the information you have provided to ACPI and make corrections to it. We may request that you provide corrections in writing. You may address corrections, questions, or privacy related complaints to our Privacy Officer:
General Counsel and Chief Privacy Officer
Aligned Capital Partners Inc.
1001 Champlain Avenue, Suite 300
Burlington, Ontario, L7L 5Z4
Retention of Personal Information
ACPI may retain your personal information on file after you cease to be a client of ACPI for as long as ACPI requires such information, or as long as is demanded by our regulatory and legal requirements.
We Strive to Protect Your Personal Information
All employees, associated advisors, agents and suppliers who are granted access to client records understand the need to keep this information protected and confidential. They know they are to use the information only for the purposes intended. This expectation is clearly communicated. We’ve also established physical and electronic systems safeguards, along with proper processes, to protect client information from unauthorized access or use.
BY OPENING AN ACCOUNT AT ACPI, YOU ARE PROVIDING CONSENT TO ACPI TO COLLECT, USE AND DISCLOSE YOUR PERSONAL INFORMATION AS SET OUT IN THIS AGREEMENT.