MERCER LIMITED CONFLICTS OF INTEREST POLICY
Date: August 2018
This policy explains how we identify, prevent and manage actual or potential conflicts of interest which may arise between our clients and ourselves, or between one client and another in circumstances where we are providing our products and services. We will take all reasonable steps to prevent conflicts of interest from adversely affecting the interests of our clients.
The identification, prevention and/or management of conflicts of interest is an ongoing process. Mercer believes we have a conflict-aware environment, core to which are the following elements:
- Our Code of Conduct – Employees are required to comply with Mercer’s Code of Conduct contained in the Marsh & McLennan Companies (“MMC”) Policy, The Greater Good, as a condition of employment. The Greater Good has clear requirements and guidelines for dealing with ethical matters, including conflicts of interest.
- Client Confidentiality Obligations – Employees are made aware of their obligations to protect client confidentiality and to comply with insider trading and related laws and regulations.
- Gifts and Entertainment Policy – Employees are required to comply with our gifts and entertainment policy, which is designed to ensure that they are not unduly influenced by the receipt of gifts, meals, or entertainment.
- Personal Investing Reporting – Employees are also subject to policies governing their personal investing, which, in general, requires reporting of certain personal investments.
TYPES OF CONFLICT
Mercer has an obligation to act in the best interests of our clients and to comply with our statutory and regulatory requirements.
This policy covers the following areas of potential conflict:
- The personal interests of an employee of Mercer conflicts with a duty owed to a client or clients.
- The corporate interests of Mercer conflicts with the best interests of a Mercer client or clients.
- A duty Mercer owes to one client conflicts with a duty to another.
IDENTIFICATION OF CONFLICTS
When considering whether a conflict of interest does, or has the potential to exist, the following will be taken into account as appropriate:
- Is Mercer likely to make a financial gain, or avoid a financial loss, at a client’s expense?
- Does Mercer have an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is separate and distinct from the client’s interest in that outcome?
- Does Mercer have a financial or other incentive to favour the interests of one client (or group of clients) over the interests of another client?
- When providing a service to a client, does Mercer receive or will it receive from a person other than the client an inducement in relation to a service provided to the client, in the form of monies, goods or services, other than the standard fee for that service?
Conflicts of interest may occur for example:
- From earning higher revenues or profits from certain types of client arrangements, including from providing a more complex, higher-cost solution for clients when a simpler, lower-cost solution may be available.
- From relationships Mercer may have with providers of services or products to our clients, including fee arrangements or commissions.
- From relationships Mercer has with multiple parties related to the one corporate entity each of which may have differing needs.
- From the receipt of confidential information.
- From performance related remuneration paid to employees.
- From personal relationships our employees may have with our clients or service providers.
- From gifts or entertainment provided to clients or prospects, or received by our staff from key service providers.
- From employees holding non-Mercer positions.
MANAGING POTENTIAL CONFLICTS
Mercer has policies, procedures and codes in place to manage such conflicts including the MMC Code of Conduct, “The Greater Good”, Personal Account Dealing Policy, Gifts and Entertainment Policy and Directorships and Outside Positions Policy.
In addition to various policies and procedures, the following controls are examples of those used for managing conflicts of interest:
- Information barriers to prevent/restrict the flow of information to certain employees in order to protect the interests of our clients. This could involve the physical separation of certain employees, the use of separate teams to act for certain clients and/or restrictions on employees access to client folders.
- Clear desk policies.
- Peer review.
How we manage a specific conflict will depend on its nature and significance. For example, we may be unable to undertake work for clients if we identify an actual rather than a potential conflict and there is a risk that our client’s interests may be damaged. Or we may disclose or seek the informed consent of the client(s) affected by a conflict before we provide products or services.
This document is not intended to create third party rights or duties and does not form part of a contract between Mercer and our clients.
This policy supersedes and replaces any previous Mercer policies on this subject. Mercer reserves the right to modify, suspend or terminate this policy at any time.