Engagement Letter An engagement letter clarifies the services

Engagement Letter • An engagement letter: “clarifies the services that the client expects the advisor will provide in the immediate transaction and ongoing relationship” - FSCO Life Insurance Agents 2015/16 Report • Clarifying client expectations: • “important to clarify upfront the client's expectations about the nature of the services the advisor can/will provide, e. g. , does client want to purchase predetermined products or does client want professional advice and/or product recommendations? • any advisory fees should be disclosed • what level of ongoing service will be provided? ” - The Approach: Serving the Client through Needs-Based Sales Practices

How does it help your client? • Clients understand: • What they can expect from you - avoids surprises or confusion • Any fees that may be associated with your services • Their own responsibilities in the relationship - for example: • Providing information such as financial situation, family status, risk tolerance etc. • Keeping you up to date on significant changes in their circumstances • Making decisions based on the advice you provide

How does it help you? • Demonstrates professionalism and provides an opportunity to showcase how you add value • Clear documentation is helpful for future client complaints or litigation • FSCO will expect to see engagement letters in your client files when they conduct examinations

What should you include? • Will vary depending on the services you provide and the nature of the client • Include responsibilities of both parties: client and advisor • Cover the following areas: • • Purpose of the relationship Services that you will provide (your value proposition) Services that you will not provide (e. g. comprehensive tax planning) Responsibilities of the client Compensation Privacy and confidentiality Contact information

Additional options • Consider including required disclosure in the same document: • Licenses and jurisdictions • Companies you represent • Nature of relationship with insurers (e. g. if ownership interest) • How you are compensated • If you may be eligible for additional compensation such as bonuses, travel conferences etc. • Conflicts of interest

Sample engagement letters • Equi. Net®: (Online Tools & Information Compliance Resources) ® Equi. Net and Equitable Life of Canada are registered trademarks of The Equitable Life Insurance Company of Canada

Combined engagement/disclosure letter

Content of engagement letters

Combined engagement/disclosure letter

Combined engagement/disclosure letter

Combined engagement/disclosure letter

Combined engagement/disclosure letter