scholarly journals SO MUCH OWED BY SO MANY TO SO FEW: HOW THE FINANCIAL ADVISORY AND INTERMEDIARIES ACT 37 OF 2002 ADDRESSES “CONFLICT OF INTEREST”

Obiter ◽  
2021 ◽  
Vol 33 (1) ◽  
Author(s):  
Daleen Millard
Keyword(s):  
Financial Institutions ◽  
Conflict Of Interest ◽  
Financial Services ◽  
Conflicts Of Interest ◽  
Financial Supervision ◽  
Management Policy ◽  
Financial Services Industry ◽  
Regulatory Structure ◽  
Term Insurance ◽  
Services Industry

Winston Churchill delivered his famous speech entitled “The Few” after the Battle of Britain of 1940. This historical conflict saw 2353 young men from Great Britain and 574 from overseas, pilots and other aircrew fly at least one authorized operational sortie with an eligible unit of the Royal Air Force or Fleet Air Arm during the period 10 July to 31 October 1940. Although conflict on the scale of a world war cannot be equated to conflicts of interest between financial-services providers (FSPs), representatives and clients, the potential damage that can be caused by intermediaries and representatives who act in their own interest can be devastating to that particular client. In addition, it also has wider implications for the financial-services industry. It is consequently up to the FinancialServices Board (FSB) to ensure that conflict of interest between intermediaries and representatives and clients are managed in anacceptable way. As a matter of background: The FSB was established by the Financial Services Board Act (97 of 1990) and has as its main objective the supervision of financial institutions in order to achieve maximum consumer protection. As such, the FSB acts as statutory registrar of a variety of financial institutions. Hattingh and Millard explain that the FSB is currently in control of the Collective Investment Schemes Control Act, the Financial Services Board Act, Financial Institutions (Protection of Funds) Act , Financial Supervision of the Road Accident Fund Act, Friendly Societies Act, Inspection of Financial Institutions Act, Long-term Insurance Act, Pension Funds Act, Short-term Insurance Act, Supervision of the Financial Institutions Rationalisation Act, the Securities Services Act, and the Financial Advisory and Intermediaries Act. The FSB drafted the FAIS Act with the aim of creating a regulatory structure which regulates the way in which intermediary and advisory services in respect of financial products are rendered. Conflict of interests is but one of the issues that arise between intermediaries, advisors, financial-services providers and clients and the purpose of this note is to analyse a number of key issues introduced by Board Notice 58 of 19 April 2010. This note sets out to explain what the position was before the introduction of the new rules on the management of conflict of interest. It then proceeds to discuss the new definitions that now form part of the legislation. In addition, it discusses the detailed provisions pertaining to conflict of interest and explains what a conflict-of-interest management policy entails. Finally, the note evaluates the new regulations and asks whether they have thepotential to eliminate unfair dealings by advisors and intermediaries and thereby enhancing the professionalism of those who work in the financial-services industry.

“Best interest” of whom?

2016 ◽  
Vol 17 (1) ◽  
pp. 83-100
Author(s):  
Jeffery E. Schaff ◽  
Michele L. Schaff
Keyword(s):  
Conflict Of Interest ◽  
Financial Services ◽  
Conflicts Of Interest ◽  
Standards Of Care ◽  
Financial Services Industry ◽  
Valuable Insight ◽  
Best Interest ◽  
Content Type ◽  
Services Industry ◽  
High Standards

Purpose Explains the US Department of Labor’s newly proposed “Conflicts of Interest” rule and provides a critical analysis of its impact should it be adopted as proposed. Design/methodology/approach Explains the DOL’s proposed Conflict of Interest rule and discusses how it changes the current fiduciary standards of care under ERISA. The article then probes more deeply into the practical matters involved in implementing the rule, and into the realities of how it would impact fiduciary standards generally, investors, the financial services industry and securities arbitrations. Reactions to the proposed rule are then explained against the backdrop of the practical implications thereof. Findings This article concludes that the DOL’s proposed Conflict of Interest rule, albeit well-intended, is not reasonably designed to achieve its stated goal and would instead likely harm those whom it purports to help. Ironically, it also potentially waters down the existing high standards of current fiduciaries. The article supports the DOL’s goal of greater responsibility for financial service professionals and proffers an alternative solution that could achieve the desired result more effectively. Originality/value This article offers valuable insight on the realities of the proposed law and practical guidance on its implications to the investing public, the financial services industry and securities attorneys.

Affluent and Nonaffluent Consumers′ Needs: Attitudes, and Information‐Seeking Behaviour in the Financial Services Marketplace

1990 ◽  
Vol 4 (4) ◽  
pp. 41-54 ◽  
Author(s):  
Edward G. Thomas ◽  
S.R. Rao ◽  
Rajshekhar G. Javalgi
Keyword(s):  
Statistical Analysis ◽  
Discriminant Analysis ◽  
Survey Data ◽  
Financial Institutions ◽  
Financial Services ◽  
Information Seeking ◽  
Financial Services Industry ◽  
Market Segments ◽  
Information Seeking Behaviour ◽  
Services Industry

Considers the proliferation of products and services in the financial services industry aimed at different market segments. Highlights the affluent and nonaffluent market segments. Employs statistical analysis of survey data to evaluate the financial services needs, attitudes, and information‐seeking behaviour of these segments. Suggests implications for the managers of financial institutions, based on the study findings. Includes appendices on methodology and discriminant analysis used in the study.

Operational Process Management in the Financial Services Industry

2010 ◽  
pp. 1084-1105
Author(s):  
Diana Heckl ◽  
Jürgen Moormann
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
General Framework ◽  
Process Management ◽  
Dynamic Environment ◽  
Insurance Companies ◽  
Financial Services Industry ◽  
Operational Process ◽  
Production Processes ◽  
Services Industry

The financial services industry faces significant competitive pressures. Economic and political influences, incessant regulation, and fast changing markets make for a highly complex and dynamic environment. Thus, banks and insurance companies are forced to permanently improve their performance – raising process performance represents one of the biggest levers for success. This chapter analyses the challenges of operational process management for banks and insurance companies. The involvement of customers in service processes of financial institutions make these not as easy to manage as production processes. In response to these challenges, cornerstones for a general framework for operational management of service processes will be developed. The aim of this chapter is to present a framework for structuring service processes which allows combining influences by customers and an operational process management. The concept is based on the modularisation approach and will be demonstrated using a loan process as an example.

The effects of IFRS adoption and firm size on audit fees in financial institutions in Ghana

2019 ◽  
Vol 32 (3) ◽  
pp. 436-453
Author(s):  
William Coffie ◽  
Ibrahim Bedi
Keyword(s):  
Financial Institutions ◽  
Firm Size ◽  
Financial Services ◽  
Audit Fees ◽  
Financial Services Industry ◽  
Content Type ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
Services Industry ◽  
The Cost

Purpose This study aims to investigate the effects of international financial reporting standards (IFRS) adoption and firm size on auditors’ fees determination in the Ghanaian financial industry. Design/methodology/approach The authors use the annual report of 52 listed and non-listed firms spanning from 2003 to 2014. Guided by the hypotheses, the authors conditioned audit fees on IFRS adoption and firm size and execute robust fixed effects panel regression. Findings The results show that IFRS adoption has a positive coefficient with audit fees suggesting that the adoption of IFRS, indeed, increases the audit fees paid by banks and insurance firms, as well as the industry as a whole. The results are consistent with the idea that IFRS adoption increases auditor efforts with respect to time and complex nature of some aspect of the standards. Again, as expected, the coefficient of size is positively and significantly related to audit fees. This indicates that the size of the auditee plays a vital role in determining audit fees. Research limitations/implications The study is limited by industry (i.e. the financial services industry) and geography (i.e. Ghana). The authors propose further research that will widely consider other sectors and countries to improve the current scanty literature in this area. Besides, theoretically, the study is limited to the lending credibility theory and feels compelled to reiterate the importance of considering alternative theoretical perspective(s) in future research. Practical implications This study is significant to practitioners as it demonstrates the importance of the determinants of the auditors’ fees. It helps auditors to apply the relevant charging formula when determining audit fees, while it helps managers to improve upon the quality of reporting to control audit bill and forecasting their audit expenditure. Originality/value The results of the study extend the literature on the cost side of IFRS adoption by investigating the financial services industry and non-listed firms in a new context, i.e. a developing country where this research is uncharted. The existing studies based their analysis on either cross-section or pooled analysis and shorter post-adoption period (Cameran and Perotti, 2014). However, using an extended post-adoption period data, the authors base the study on analytical panel model, which directly examine the cost side of IFRS adoption with size as joint key explanatory variables with emphasis on financial institutions and external auditors.

Cooperation and Collaboration

2017 ◽  
Author(s):  
Gordon L. Clark ◽  
Ashby H. B. Monk
Keyword(s):  
Organizational Change ◽  
Financial Institutions ◽  
Financial Services ◽  
Financial Services Industry ◽  
Senior Managers ◽  
Changing Environment ◽  
Space And Time ◽  
Services Industry

Chapter 10 explains how and why new modes of cooperation and collaboration between, rather than within, institutions have become important. It summarizes the distinctive attributes of the global financial services industry. Critically, it looks at the value of cooperation and collaboration as a means of giving senior managers opportunities to adapt or extend the capacities of their institutions in a changing environment. This characterization of cooperation and collaboration is applied to the design of investment platforms bringing together financial institutions across space and time to invest in opportunities beyond inherited capabilities and resources. Findings relevant to the literature on organizational change are explored as a way to better understand the nature and shape of global financial services. The limits of cooperation and collaboration are identified with respect to the capacity of senior managers to make commitments on behalf of their organizations.

Operational Process Management in the Financial Services Industry

2010 ◽  
pp. 529-550 ◽  
Author(s):  
Diana Heckl ◽  
Jürgen Moormann
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
General Framework ◽  
Process Management ◽  
Dynamic Environment ◽  
Insurance Companies ◽  
Financial Services Industry ◽  
Operational Process ◽  
Production Processes ◽  
Services Industry

The financial services industry faces significant competitive pressures. Economic and political influences, incessant regulation, and fast changing markets make for a highly complex and dynamic environment. Thus, banks and insurance companies are forced to permanently improve their performance – raising process performance represents one of the biggest levers for success. This chapter analyses the challenges of operational process management for banks and insurance companies. The involvement of customers in service processes of financial institutions make these not as easy to manage as production processes. In response to these challenges, cornerstones for a general framework for operational management of service processes will be developed. The aim of this chapter is to present a framework for structuring service processes which allows combining influences by customers and an operational process management. The concept is based on the modularisation approach and will be demonstrated using a loan process as an example.

Identity and Access Management

2011 ◽  
pp. 208-239
Author(s):  
Nick Pullman ◽  
Kevin Streff
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Financial Services Industry ◽  
Access Management ◽  
Broad Concept ◽  
Services Industry

This chapter discusses the role of identity and access management in the financial services industry. Identity and access management is a very broad concept that has far reaching rewards or consequences within an organization. This chapter provides a survey of the topics within identity and access management so that managers and security administrators of financial institutions can gain an understanding of the issues and possible solutions.

scholarly journals Impacts of Conflicts of Interest in the Financial Services Industry

2015 ◽  
Author(s):  
Jeremy Burke ◽  
Angela Hung ◽  
Jack Clift ◽  
Steven Garber ◽  
Joanne Yoong
Keyword(s):  
Financial Services ◽  
Conflicts Of Interest ◽  
Financial Services Industry ◽  
Services Industry

A 3D involvement comprehension model for the digital innovation fostering initiatives of the financial services industry.

2021 ◽  
Vol 9 (4) ◽  
pp. 83-90
Author(s):  
Dimitrios S. Stamoulis
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
3D Model ◽  
Financial Services Industry ◽  
Entrepreneurial Success ◽  
Strategic Positioning ◽  
Digital Innovation ◽  
Industry Sector ◽  
Services Industry ◽  
Innovation Support

The financial services industry word-wide is active not only in financing the innovation, but also in creating opportunities for digital innovation take-up that will ultimately lead to economic growth and entrepreneurial success. By analyzing the activities of the four major financial institutions in Greece in the area of innovation support activities, a 3D model is constructed that clearly demonstrates the strategic area that is shaped for initiatives that foster innovation in the financial services industry sector. This model is also useful as a strategic positioning tool as well as a comprehension model for those actors that would like to enter into this area and gain an understanding of the projects and activities already run by the actors in this field.

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