The policies below include:

 

1. Order Execution Policy (formerly Best Execution Policy)

2. Management of conflicts of interest

3. Complaints policy 

4. Client money notice 

5. Stewardship Code

6. Pillar 3 Disclosures

 

1. ORDER EXECUTION POLICY (formerly Best Execution Policy)

Introduction

The EU Markets in Financial Instruments Directive (‘MiFID’) and corresponding rules of the Financial Conduct Authority (‘FCA’) require that investment firms establish an Order Execution Policy and take all sufficient steps to obtain the best possible results for their Clients when executing a Client Order.

This policy outlines all of the sufficient steps taken by Rowan Dartington (‘RD’ or ‘we’ or ‘us’) to ensure that ‘best execution’ is achieved – that is obtaining the best possible results for you when undertaking transactions on your behalf.

We will take steps to achieve the best execution of client orders, subject to different factors which are dependent on the financial instrument and the type of market on which the order is executed.

Client Classification

Our Clients are classified as Retail Clients unless they opt-up to either Professional or Eligible Counterparty status[1], but regardless of classification we will treat all Clients the same for the purposes of achieving best execution, or getting the best possible result for you when carrying out trades. We always aim to achieve best execution on a consistent basis as outlined in this Order Execution Policy.

[1] The definitions of Professional and Eligible Counterparties can be found in the FCA Handbook

Execution Factors

When dealing for you we will consider the following:-

• Your characteristics (including your regulatory Client categorisation as mentioned above)
• The characteristics of the financial instrument concerned and of your order
• Where such orders can be carried out (i.e. the ‘execution venues’).

In assessing the most appropriate route to carry out your order we will consider the following criteria which we have ranked in order of importance:

 

*FX – A stand-alone foreign exchange transaction

**OTC – Any security which needs to be traded bilaterally with a counterparty, but not conducted over an exchange.

 

Best Execution Criteria	Rank
Critical	3
Important	2
Not important	1
Not applicable	0

 

Exposure to different financial assets can be achieved directly, by purchasing the actual securities, or indirectly, by purchasing a collective investment of these securities. The venue and method chosen will be dependent upon which of the routes is chosen.

When dealing in a financial instrument on your behalf, we will exercise our discretion in assessing the criteria that we need to take into account to achieve best execution. The relative importance of these criteria will be judged on an order-by-order basis, in line with our commercial experience and with reference to market conditions. In executing orders for Clients, in the absence of any specific instructions, we generally give precedence to the factors that allow us to deliver the best possible results in terms of value (total cost) to the Client.

If you are a Retail Client, the best possible result will normally be determined in terms of the total consideration, being the price of the instrument and the costs of the transaction. However, there may be circumstances in which this is not the primary consideration. Where the instrument is illiquid or the size of the order unusual relative to the normal, then other factors may take precedence, although we will also have to use our judgement in assessing whether particular trading strategies may move the market (incur implicit costs). Alternatively, we may have to execute the order over the course of a number of days in order to complete it. Likewise, the characteristics of an order may require us to transmit an order to a counterparty to execute on our behalf, rather than dealing direct with that counterparty (for example, orders in securities traded on overseas markets).

Execution Venues

For each instrument we execute on behalf of Clients, it is our policy on an ongoing basis to consider the variety of trading venues or sources of liquidity available from time to time. This enables us to obtain on a consistent basis the best possible result for the execution of transactions. In satisfying this policy, we may consider the use of one or more of the following venue types:

• Regulated Markets (e.g. London Stock Exchange or overseas equivalent)
• Multilateral Trading Facilities (e.g. Non-Exchange Financial Trading Venues)
• Systematic Internalisers (e.g. Market Makers)
• Third party investment firms and/or affiliates acting as Market Maker or other liquidity providers
• Non-EU entities performing similar functions

We regularly assess the execution venues available and may add or delete venues in accordance with our obligation to provide you with the best possible execution result on a consistent basis. An up to date list of significant execution venues is attached in Appendix 1. Where we believe that best execution can be achieved on behalf of the Client outside of Regulated Markets or Multilateral Trading Facilities, it is our policy to do so. By agreeing to the Order Execution Policy and our terms and conditions, you are giving your express consent to this requirement.

In certain financial instruments there may only be one execution venue. In executing a trade in such circumstances we will presume that we have provided the best possible result in this respect for these types of instruments.

Order Handling

Rowan Dartington is committed to prompt and fair treatment of all Clients’ orders. Having assessed the relevant criteria and any specific instructions provided by you, we will select the most appropriate venue(s) from those available and execute your order accordingly.

Where you give us specific instructions regarding the execution of an order, or part of an order, we are obliged to execute the order in accordance with those instructions, even though this may prevent us from applying the principles stated in this policy.

Limit Orders

Typically we will deal ‘at best’, using prices at the prevailing price in the market. However, if you give us an investment instruction at a specified price limit and for a specified size (a ‘limit order’), then it may not always be possible to execute that order under the prevailing market conditions. If we receive clear instructions from you as to how to execute your order, we will not pay regard to any of the execution factors we would usually consider. We would be required to make your order public (i.e. show the order to the market) unless you agree that we need not do so. We believe it is in your best interests if we exercise our discretion as to whether or not we make your order public. By agreeing to the Order Execution Policy you agree to us not making your orders public, unless we consider it is your best interests for us to do so.

Order Aggregation

We may combine (or ‘aggregate’) an order for our Clients with orders of other Clients. We would only aggregate a client order if it was unlikely to work to the overall disadvantage of the Client. However, the effect of aggregation may on some occasions work to the Clients’ disadvantage and may on occasions result in our Clients obtaining a less favourable price than if their order was executed separately.

If an order has been aggregated, but not been allocated in full, then generally the distribution of assets will be allocated on a proportionate basis. In these circumstances, it may be more costly to the Client as we have to fulfil the order over several transactions, each subject to our minimum charges.

Review and Monitoring

We will review our execution arrangements and venues on at least an annual basis or whenever a material change occurs that affects our ability to obtain the best possible result for our Client orders. We will inform you of any material changes to our execution arrangements or our Execution Policy. We will also periodically monitor the quality of our execution against the factors detailed in this Policy to identify and, where appropriate, enhance our arrangements.

RD will actively monitor compliance with the Order Execution Policy and annually review the Order Execution Policy against the FCA’s rules and guidance annually, and ad-hoc, driven by regulatory requirements/changes.

General

RD operates on the basis that all Retail Clients would be legitimately relying on the firm to deliver best execution for all transactions, regardless of how they arise.

By signing or agreeing to the declaration in the account opening form, you (or your authorised intermediary) consent to our Order Execution Policy including those sections that require your prior express consent.

Please note that if you do not provide your consent to our Order Execution Policy you may be limiting our ability to execute your orders on the most advantageous terms for you. Accordingly, if you do not consent to this Order Execution Policy we will be unable to open an account for you.

From 2018, Rowan Dartington will publish execution quality information on its top 5 execution venues and brokers.

Appendix 1

Execution Venues and Counterparties

Instrument	Main Venues Used	Main Constituents (N.B. these lists are not exhaustive)
UK Stocks and Shares/Warrants	London Stock Exchange, ISDX/PLUS and approved member firms of these venues. We may also use Multilateral Trading Facilities and Dark Pools.	Winterfloods, Peel Hunt, Knight Securities, Investec Bank, Numis Securities, Cenkos, Canaccord, Shore Capital, Singer Capital, Thomas Grant.
Foreign Stocks, Warrants and Depositary Receipts	Regulated exchanges	Knight Securities, Winterfloods, Peel Hunt, Cannacord, Nomura, ICAP, Kaupthing, C Hoare & Co , Liberum Capital.
Investment Trusts	London Stock Exchange	Cantor Fitzgerald, Panmure Gordon, Winterfloods, Collins Stewart, Cenkos, Cannacord Adams, Invesco, Investec, Numis Securities.
Fixed Interest/Bonds (non-UK Government and Corporate)	Major liquidity providers and brokers	Winterfloods GILTS, Bridport, BNP Paribas, Barclays, Investec, Morgan Stanley, Peel Hunt, Rabobank, UBS, Societe Generale, Numis Securities.
Unit Trusts/Exchange Traded Fund’s (ETF’s)	Managers of the funds, Cofunds or regulated markets for exchange traded funds.
UK Treasury Bonds	London Stock Exchange	Winterflood GILTS, Cantor Fitzgerald

 

RTS Top 5 Venue Report

2. MANAGEMENT OF CONFLICTS OF INTEREST 

 

What are conflicts of interest?

A conflict occurs where:

• our (or any subsidiary /representatives of Rowan Dartington)  interests conflict with the duty owed to you; or

•  where our duties to another client conflicts with our duty to you

In accordance with the requirements of the FCA (our regulator) we aim to treat you fairly by implementing adequate systems and controls to identify, monitor and manage these risks or any potential risks.

As the fair treatment of our clients is paramount to the ethical standard of Rowan Dartington it is incumbent on our Board and staff to consider and escalate any matter that they consider may conflict with our policies. The Risk Committee will review any new conflicts that have been identified.  

About us

Rowan Dartington provide Wealth Management Services, including investment advice and management as well as dealing and custodian services.  We are part of the St. James’s Place Wealth Management Group.

We have an Independent Financial Adviser (Stafford House Investments) who provide financial planning advice on an independent basis.   A C Mole is also independent financial planning advisers, who are a trading name of Stafford House Investments.  The advice these companies provide may or may not involve referring clients to Rowan Dartington.

Purpose of this information

To explain to you what policies we have in place to manage conflicts and highlight what principle conflicts exist and what is in place to mitigate them.  Should you wish to discuss anything further, please contact your Investment Manager.

FCA Requirements

FCA Principle 8 – ‘A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client’. The SYSC Rules also require us to have adequate systems and controls to manage risks. The new MiFID Rules require us to formally document this. It is not sufficient that we rely solely on disclosure of conflicts in customer agreements etc.

 

Conflicts Inventory

Principal Conflicts	Management Arrangements
Conflict Risk	What we do
Suitability i.e. Staff recommend services or transactions which are not appropriate for the client	We have a robust training programme in place for our advice processes to ensure that our Investment Managers and Advisers provide appropriate advice.  Our monitoring programme provides a control mechanism to ensure processes are being consistently deployed and advice is suitable.   There are internal policies in place to deal with scenario’s that may cause conflict in advice processes, such as; Commissions receive from third parties; Staff having power of authority over an account i.e. Trustee, Executor, Director or Power of Attorney; Interest payments All staff are expected to disclose outside business interested.
Dealing and Trading i.e. our staff may delay investments	We have a best execution policy which Investment Managers and Financial Advisers are expected to adhere to ensure that we act in your best interest. Rowan Dartington have a transactional monitoring programme to review trades which have been completed to ensure best execution principles have been achieved.
Aggregation of orders i.e. one client may be treated more favourably than an other	To mitigate this we may combine one client’s orders with another clients order.   The intention is to ensure fairness to all clients when placing particular trades, particularly for discretionary clients.  This could result in a less favourable price or increased trading costs. When undertaking trades of this nature we will ensure our clients best interests are considered.
Placings and new issues i.e. one client may be treated more favourably than an other	Where we agree to take part in a new issue or placing, we will do this in combination with other client orders.  If the allocation is scaled back it will be applied pro rata across all participating clients. Sometimes staff may take part in these trades also. Where they do and where the allocation is scaled back, we will scale back staff orders before applying any scaling to our clients.
Personal Account (staff) Dealing (PA) i.e. Staff may deal on their own account ahead of clients and obtain better prices	All staff and connected parties are expected to comply with our Personal Account Dealing policy.  This requires staff to obtain prior approval for trading. The prior approval means that checks can be made to ensure that staff do not; Trade ahead of clients Trade ahead of any public announcements about the stock being traded
Staff remuneration i.e. bonus and salary structures may entice staff to act inappropriately when managing client assets	We aim through our remuneration package to consider the long-term interests of our staff.  These are designed to correlate with the interests and financial wellbeing of our clients, so to discourage inappropriate behaviour or excessive trading.  Therefore, activities are overseen and monitored.
Gifts and Hospitality (Inducements) i.e. The integrity of either staff or suppliers is compromised by excessive inducements.	We have enforced internal policies, through training and monitoring, to ensure that gifts or hospitality received from or provided to clients, supplier, company and other are not excessive. Staff are required to disclose where they receive or give gifts or hospitality when they are over a notional value.  Where the triggers are met pre-approval will be required, via our Compliance and Risk Department, to accept or provide a benefit like this. In all cases, there needs to be a business motive for the gift or hospitality which aim is to enhance the quality of service we provide to you. We also maintain a register or gifts and hospitality received or provided which is overseen by the Compliance and Risk Department.
Research i.e. our research team may be un-duly influenced to place stock or funds on to our core lists	Our research team are independent from other teams in the business.  The remuneration package for these staff is designed not to influence their decision making process. Any additions or deletions from the core list are discussed at either the Asset Allocation Committee or Investment Management Committee before the changes are made to the core list.  This information will not be disclosed to staff ahead of formal announcement of the core stock list changes.

Disclosure

If we are unable to manage a conflict, or where we believe our measures and controls are not sufficient to protect your interest we will disclose the conflict to you.  The aim of this is to allow you to make up your own mind as to whether to continue our business relationship with regard to the service or advice we provide you.

 

3. COMPLAINTS POLICY 

Procedures

We are sorry you have cause to complain to Rowan Dartington.

Our aim is to resolve any client concerns fairly, effectively and promptly.

Rowan Dartington & Co Ltd always aims to provide the highest standard of service to its clients but on occasions we may fall short of this goal leaving clients and potential clients dissatisfied.

When we receive any letter, fax, email, telephone call or personal communication which expresses dissatisfaction about services which we have provided or failed to provide, we will attempt to resolve the matter promptly and fairly. Consumers will also be able to tell us at any point that they don’t want to take their complaint any further.

Where possible, please include the following details with your complaint:

• Your full name, address, account reference and your telephone number to contact you on;
• A full description of your complaint and any details you can provide on what you feel would be appropriate in order to resolve your complaint, and;
• Any relevant documentation you wish us to consider as part of the complaint investigation

If complaining on behalf of another person, you must be authorised to do so and we reserve the right to contact the individual who you are complaining on behalf of to confirm.

How to make a complaint

You can refer your complaint to Rowan Dartington via any form of communication, but where possible, please use the following contact details:

Address: Complaints Team, Rowan Dartington, Colston Tower, Colston Street, Bristol, BS1 4RD

Email: complaints@rowan-dartington.co.uk

Telephone: 0117 933 0050

Expressions of Dissatisfaction

Where possible, we will look to resolve the issue by close of business 3 days after receipt of your complaint and we will write out to you confirming resolution. You still have the right to refer your complaint to the Financial Ombudsman Service (details below) and/or the alternative dispute resolution (ADR) service should you not be happy with the outcome.

Acknowledgment of Complaints

Where it is not possible to resolve the issue within 3 business days, our Complaints department will complete an investigation.

If this applies, we aim to issue an acknowledgement to you within 5 business days, detailing our understanding of your concerns and confirming the next steps.

Complaint Resolution

We will collate all the documentary evidence relevant to your complaint and, where applicable, ask for the comments of any individual involved. It may also be necessary for us to contact third parties for information. 

During the investigation

Once we have done this, we will review the evidence, make our assessment and let you know the outcome of our investigation in writing.

• If we are unable to resolve your complaint within 4 weeks of receipt we will send you a letter explaining why we need more time to complete our investigation and let you know when to expect our response.
• If our investigation is going to take longer than 8 weeks, we will write to you again to explain why and let you know when we expect to be able to conclude matters. This letter will also inform you of your right to refer your complaint to the Financial Ombudsman Service (see ‘Your Rights’ below), if applicable.

At the end of the investigation

When we have finished our investigation we will write to you with our full response to the concerns you raised.

Our final response will set out;

• the facts which have been established during the investigation; and
• any resolution to be offered.

This resolution will consider;

• Fair compensation for actual or potential financial loss;
• Any reasonable costs you have claimed;
• Lost interest which could have accrued since the date on which any possible loss was suffered; and
• Fair redress for any inconvenience or distress.

Your Rights

If you are not completely happy with the outcome and resolution of your compliant, you have additional rights to independent review or assistance.  These additional rights are set out below:

Financial Ombudsmen Service

You have the right to refer a complaint directly to the Financial Ombudsman Service if we have had an opportunity to consider it and have either:

• Supplied you with a final response; or
• 8 weeks have elapsed since we have received your complaint and a final response has not been issued.

More information on the Financial Ombudsmen Service can be found here: http://www.financial-ombudsman.org.uk or you can contact them using the below details:

Address: The Financial Ombudsman Service, Exchange Tower, London, E14 9SR

Email: complaint.info@financial-ombudsman.org.uk

Telephone (from within the UK): 0800 023 4567

Telephone (from outside the UK): +44207 964 0500

We will also issue you with a leaflet providing these details with our formal responses to your complaint.

Time limits for referral to the Ombudsman

In line with current rules, you will have six months from the date of our final reply to refer your complaint to the Financial Ombudsman Service if you remain unhappy with our response.

The Financial Ombudsman Service might not be able to consider your complaint if:

• What you are complaining about happened more than 6 years ago; and
• You are complaining more than three years after you realised (or should have realised) there was a problem.

If you do not refer your complaint in time, the Ombudsman will not have our permission to consider your complaint and will only be able to do so in very limited circumstances.  For example, if the Ombudsman believes that the delay was as a result of exceptional circumstances.

Alternative 

If you remain unhappy and do not agree with the Financial Ombudsman’s final decision, you are able to:

• Utilise an alternative dispute resolution (ADR) entity (this gives you access to an independent professional to review or assist with your complaint); or 
• Potentially able to take civil action.

More information on ADR can be found on the Citizens Advice website:

www.citizensadvice.org.uk

 

4. CLIENT MONEY NOTICE 

As a firm which is both authorised and regulated by the Financial Conduct Authority (FCA), Rowan Dartington is required to comply with the rules prescribed in the FCA Handbook. The handbook details rules on handling both client assets and client money.

 

Rate change with effect from 1 July 2017

With effect from 1 July 2017, the rate of interest paid by Rowan Dartington on any cash balances held will reduce to nil.

 

 

5. THE STEWARDSHIP CODE

The principal business of Rowan Dartington and Co (“RD”) is discretionary and advisory portfolio management, primarily for retail clients but also, on occasion, for clients who can be classified as “professional” according to UK regulation. 

In this capacity, RD invests on behalf of its clients in a wide range of securities – principally collective vehicles but also directly into the listed shares of UK companies (UK equities). 

The UK Stewardship Code is overseen and published by the Financial Reporting Council (FRC), which is the independent body established to oversee financial reporting, accounting and auditing and corporate governance in the UK.  The Code embodies guidelines for institutional investors to meet their obligations as owners of UK listed corporate securities.

RD primarily manages the assets of retail clients; we have only a small number of institutional or professional clients.  To the extent that we do have professional clients, the FCA requires us to publish the extent to which we are signatories to, or comply with, the UK Stewardship Code. Regulation is silent on our obligations in respect of retail clients but the policy as described below applies to the entirety of our holdings.

The Code

As with the UK Corporate Governance Code, the UK Stewardship Code is not a rigid set of rules. It consists of principles and guidance. The principles are the core of the Code and the way in which they are applied should be the central question for the institutional investor as it determines how to operate according to the Code.

Those organisations that choose not to comply with one of the principles, or not to follow the guidance, should deliver meaningful explanations that enable the reader to understand their approach to stewardship –  this is known as “comply or explain”.   For each of the seven Principles underlying the Code, we explain our approach below.

The FRC recognises that not all parts of the Code are relevant to all firms. For example, smaller institutions may judge that some of its principles and guidance are disproportionate in their case. In these circumstances, they should take advantage of the ‘‘comply or explain’’ approach and set out why this is the case.  Of particular importance are the size and complexity of the firm, the nature of the risks and challenges it faces, and the investment objectives of the firm or its clients.

RD is not a signatory to the Code, for reasons which are explained below.

Principle 1: Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities.

This explains how we adapt the Code to our everyday activities.

RD is a small financial services organisation which invests on behalf of our varied clients in a wide variety of different asset classes.  Some of those clients invest with us on an advisory or execution-only basis – in respect of those clients, we have no contractual rights to vote those holdings nor to exercise other stewardship activities.  Furthermore, to a large extent, we derive many of those asset exposures via collective vehicles, where the opportunity for direct shareholder involvement, where the asset class permits, is very limited.  Even where we hold on clients’ behalf direct UK equity exposures, for the most part the aggregate size of those holdings is very small and the scope for direct involvement with their governance limited.

Our approach therefore concentrates on the identification of a broad range of quality investment opportunities consistent with clients’ risk profiles and the disposing of those assets when, for whatever reason, they are no longer deemed suitable.

Principle 2: Investors should have a robust policy on managing conflicts of interest in relation to stewardship which should be publicly disclosed.

RD is required by the FCA to comply with the rules governing Conflicts of Interest.  As part of this, a statement of how we manage those conflicts is on our website.  This policy applies to all conflicts of interest, including those in relation to stewardship.

Principle 3: Investors should monitor their investee companies.

It is a critical part of the investment process at RD that we actively monitor the underlying performance of the investment securities in which our clients’ funds are held. 

In the case of direct UK equity securities, this will include regular contact by our Research team with the management of those companies and also prospective investee companies.  This occurs at regular intervals and compliance with the spirit of the UK Corporate Governance Code is a factor which is taken into account when forming an investment view.  If a company is perceived not to be acting in the best interests of shareholders, then we will not invest or consider disinvestment.

With regard to investments in collective vehicles, the level of ongoing monitoring and review of such vehicles is just as rigorous and the managers’ attitude to governance and stewardship is regularly assessed as part of that process. 

Principle 4: Investors should establish clear guidelines on when and how they will escalate their stewardship activities.

Where we have significant direct holdings in equity securities, and we have concerns about the nature of corporate governance or whether management is acting in shareholders’ best interests, then we may consider it fruitful to inform management of that fact.  But because our priority is to act in clients’ best interest, the usual course of action is to disinvest.

Principle 5: Investors should be willing to act collectively with other investors where appropriate.

In circumstances where we believe it would be in clients’ best interests, we are happy to engage with other investors on a case by case basis, while being mindful of our legal and regulatory responsibilities.

Principle 6: Investors should have a clear policy on voting and disclosure of voting activity.

Many of our investments are in collective vehicles where we do not have voting rights in respect of the underlying holdings.  In respect of directly held equity securities, for the most part our holdings are immaterial to the outcome of the vote.  For that reason, our voting activities are usually restricted to Extraordinary General Meetings governing corporate restructurings or other actions, where we have a material interest in the outcome – such events are rare.  However, individual clients are welcome to vote in respect of their own holdings, either in person or by form of proxy, which RD can arrange.

We do not engage in securities lending with client holdings.

Principle 7: Investors should report periodically on their stewardship and voting activities.

It is not our current policy to report routinely to clients on our stewardship and voting activities.  We consider such information to be so generic as to be potentially misleading.  We do not seek independent assurance of stewardship activities or voting performance on the basis that the scale of the firm’s activities would not justify the expense.

 

6. PILLAR 3 DISCLOSURE