If someone in a fiduciary position has personal or professional interests that compete with their duty to act in the client’s best interest, this is called:

If someone in a fiduciary position has personal or professional interests that compete with their duty to act in the client’s best interest, this is called:
A . Discretionary management
B . A regulatory breach
C . Full disclosure
D . A conflict of interest

View Answer

Answer: D

Explanation:

Conflict of Interest Definition:

A fiduciary position requires prioritizing the client’s best interest. When personal or professional interests compete with this duty, it constitutes a conflict of interest.

Such conflicts can undermine the trust and integrity of the fiduciary relationship.

Elimination of Other Options:

A: Discretionary management is unrelated to fiduciary conflicts.

B: A regulatory breach may occur if the conflict is not disclosed but is not inherently the conflict itself.

C: Full disclosure is a way to manage conflicts, not the conflict itself.

Reference: ICWIM Module 5: Coverage of fiduciary responsibilities and managing conflicts of interest.