If a conflict of interest cannot be avoided and may disadvantage a client, what action is required under the Code?

• A. Disclose the circumstance to the client in an appropriate manner.
• B. Proceed with the transaction and hope for best.
• C. Ignore the conflict and inform the supervisor only.
• D. Hold the transaction until the client consents.

Answer: (A)

Transparency when a conflict of interest exists that could disadvantage a client is required under the Code. If a conflict cannot be avoided, you must disclose the circumstance to the client in an appropriate manner so the client understands how the conflict could affect advice or a transaction and can decide how to proceed. This protects the client's interests and maintains trust in the professional relationship.

Proceeding with the transaction without disclosure, ignoring the conflict and only informing a supervisor, or delaying until the client consents without first informing them all fail to meet this duty. Disclosure enables informed decision-making and, if needed, allows you to adjust the arrangement or decline the transaction.