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Key points

  • Ensure you have adequate arrangements in place to manage your own conflicts of interest.
  • If you set up a conflicts process for trustees, make sure it includes a conflicts policy, register of interest, declarations and advance planning.

Managing your own conflicts of interest

You should have adequate arrangements in place for identifying, managing and disclosing your own conflicts of interest.

You should make trustees aware of any conflicts of interest that arise when you refer services or products for which you may gain some form of financial or non-financial benefits.

Ensure that trustees understand when they’re being given independent advice and when they’re being offered a service or product from a party related to an adviser.

You should inform the trustees if you tender for services to a sponsoring employer.

Trustee conflicts of interest

Trustee conflicts of interest can arise in DC schemes. They may arise, for example, when agreeing operational costs such as those relating to administration or communication with employers.

You should ensure that representation on the trustee board is as balanced as possible.

Some DC trust-based schemes, particularly those set up by insurers, appoint a trustee who is an employee of the product provider. If a provider-appointed trustee becomes aware of any business-related decisions which have a bearing on the scheme, ensure they consider the impact this may have on their role as a trustee.

Setting up a conflicts process for trustees

Trustees may ask you to help them set up a process to identify and manage any conflicts of those involved in running their defined contribution (DC) scheme. This includes trustees, advisers and service providers. You should ensure the process includes the following controls:

  • conflicts policy setting out the schemes’ approach to dealing with conflicts
  • register of interests for recording all actual or potential conflicts
  • declarations when trustees, advisers and service providers are appointed, ongoing declarations by advisers and service providers as soon as they arise, declarations at the start of trustee and sub-committee meetings
  • advance planning to identify conflicts that may occur in the future.

Detailed guidance