How should conflicts of interest be handled under FAIS?

How should conflicts of interest be handled under FAIS?

• A. Ignore conflicts to avoid client concern.
• B. Keep conflicts private unless the client requests disclosure.
• C. Identify conflicts, maintain a conflicts register, implement controls to mitigate, and disclose material conflicts to the client.
• D. Disclose conflicts only to internal auditors.

Answer: (C)

Conflicts of interest must be identified and actively managed to protect the client and ensure fair dealing. Under FAIS, a adviser or provider should recognize any situation where personal interests could influence the advice or products offered, keep a conflicts register to document these situations and the measures taken to address them, and implement controls to mitigate the impact. When a conflict is material, it should be disclosed to the client so they can make an informed decision, rather than hidden or shared only internally. This approach upholds transparency and client protection, which FAIS requires. Ignoring conflicts, keeping them private, or only disclosing them internally do not meet the regulatory duties and fail to safeguard the client’s interests.

Conflicts of interest must be identified and actively managed to protect the client and ensure fair dealing. Under FAIS, a adviser or provider should recognize any situation where personal interests could influence the advice or products offered, keep a conflicts register to document these situations and the measures taken to address them, and implement controls to mitigate the impact. When a conflict is material, it should be disclosed to the client so they can make an informed decision, rather than hidden or shared only internally. This approach upholds transparency and client protection, which FAIS requires. Ignoring conflicts, keeping them private, or only disclosing them internally do not meet the regulatory duties and fail to safeguard the client’s interests.