Canadian securities law requires Skyline Wealth Management Inc. (Skyline Wealth Management, the firm, we, us, or our) to take reasonable steps to identify, respond to, and communicate material conflicts of interest in our clients’ (you or your) best interests, including how the conflicts might impact you and how we address them in your best interest. A conflict of interest can include a number of circumstances, such as:
- where your interests are inconsistent with our interests or the interests of our representatives;
- where we or our representatives may be influenced to put our interests ahead of yours; or
- where there are advantages or disadvantages to us or our representatives that might compromise the trust you have in us. Our material conflicts of interest, both existing and reasonably foreseeable, are described below.
Proprietary Products
We distribute only securities of related issuers (proprietary products or funds), or issuers where our affiliate is the asset manager. These issuers are Skyline Apartment Real Estate Investment Trust, Skyline Industrial Real Estate Investment Trust, Skyline Retail Real Estate Investment Trust, Skyline Clean Energy Fund and select SkyDev Projects. Each of our proprietary products is managed and/or operated by parties related to us.
Because we offer only proprietary products, the suitability determination conducted by us or our representatives will not consider the larger market of non-proprietary products or whether those non-proprietary products would be better, worse, or equal in meeting your investment needs and objectives.
We may address this conflict by:
- providing you the proprietary products’ offering documents, which provide detailed information on our relationship with the proprietary products;
- conducting a suitability assessment for each trade that we recommend to you; and
- applying a product review process to assess whether the proprietary product should be included in our product offering to clients.
Related Entities and Fees
We are a part of Skyline Group of Companies. We share common directors, officers, and beneficial shareholders with other entities within Skyline Group of Companies, including the proprietary products. We may also receive from, or provide to, Skyline Group of Companies, other administrative or technology services. Our related entities pay us a fee for distributing the proprietary products to you, which is based on a percentage of your subscription amount. We are paid more for new investments in a fund than for additional investments that are made at least two years later. In addition, the majority of the proprietary products pay us a trailer fee for the services we provide to you. The trailer fee is paid as long as you are invested in the funds and is based on the amount of equity under management. We may be perceived to favour Skyline Group of Companies’ business interests over yours, to be financially motivated to distribute the proprietary products to you, or to recommend that you trade in more products or new investments for our financial benefit.
We may address these conflicts by:
- providing you the proprietary products’ offering documents, which provides detailed information on our relationship with the proprietary products, including our common ownership structure;
- conducting a suitability assessment for each trade that we recommend to you;
- disclosing the fees paid to us for distributing the proprietary products; and
- adopting policies and procedures to identify and manage these conflicts.
Compensation Practices
Our representatives’ compensation involves commissions based on sales volume, fund retention periods, and achievements. In addition, supervisory staff’s compensation may be tied to the firm’s overall sales or revenue generation or to the representatives they supervise. Our representatives and supervisory staff may be perceived to be financially motivated to make recommendations that provide them better compensation.
We address this conflict by:
- maintaining compensation arrangements so that our representatives are not financially incented to recommend one product over another;
- maintaining compensation arrangements for our compliance staff that are not tied to sales or revenue;
- conducting a suitability assessment for each trade that we recommend to you;
- having policies and procedures on compensation practices, and providing training to our representatives on their obligations to act fairly, honestly, and in good faith, and to resolve all material conflicts of interest in your best interest; and
- imposing controls and restrictions on the sale of certain Skyline Funds.
Referral Arrangements
We may, from time to time, receive a referral fee for referring you to another person or entity. We may be perceived to be financially motivated to make the referral and to favour our interests over yours.
We address this conflict by:
- disclosing the referral arrangement to you; and
- adopting policies and procedures that first determine that the referral arrangement is in your best interest, and that the other party has the appropriate qualifications to provide the services to you.
Fair Allocation
At times, availability of investment opportunities is limited. We may need to select which clients the investments will be offered to, and you may not have the opportunity to participate in the offering. We may be perceived to favour one client over another.
We address this conflict by:
- Adopting policies and procedures that seek to allocate investment opportunities among retail, institutional, advisors, portfolio managers and Skyline employees (the “client”) in a fair and equitable manner and that examine considerations such as whether the client is eligible for the investment, whether the investment is suitable for the client, and regulatory requirements and conditions set by both the issuers and by us.
- Maintaining clear communication with you concerning changes to equity raise periods, eligibility, and potential differentiation in availability between Class A and Class F/I shares.
Outside Activities
Our representatives may, at times, participate in outside activities such as serving on a board of directors, participating in community events, pursuing personal outside interests, or selling insurance products at other financial institutions. The outside activity may raise a perception that our representatives favour their own interests over yours.
We address this conflict by adopting policies and procedures that require our representatives to notify us of any proposed outside activity prior to engaging in the activity. Representatives cannot engage in the outside activity unless it has been approved and determined that it can be resolved in your best interest.
Personal Trading
Our representatives may invest in the funds, which may create an appearance or actual conflict of interest that the representative may benefit from opportunities at the expense of yourself or the funds.
We address this conflict by implementing policies and procedures that are designed to ensure that our representatives act in accordance with applicable laws and that they do not engage in personal securities transactions that are prohibited, such as insider trading. Our policies also require that representatives put your interests ahead of their own personal self-interests.
Gifts, Entertainment, and Purchasing Services or Assets from Clients
We and our representatives may be offered, or receive, gifts or entertainment, or purchase services or assets from clients, which may create an appearance that the activity influenced our decisions or recommendations.
We address this conflict by implementing policies and procedures on these activities, which includes a requirement that representatives report activities and transactions to our compliance department, and obtain appropriate approval above an internal threshold.
Account Errors
We may have a potential conflict of interest when determining when and how to resolve a pricing error or other type of account error. We could be perceived to be financially motivated in deciding how to address the error.
We address this conflict by implementing policies and procedures to standardize how we address account errors.