Конфликт интересов

From Planipedia

Thanks to PlanPlus and WEA for sharing their material for this Best Practices Guide.

Any engagement agreement should contain a paragraph dealing with conflict of interests as a general topic. An example of the wording is contained in each of the sample agreements located in the Letter of Agreement section. If there is a specific matter that could potentially represent a conflict of interest in every client situation, for example the use of proprietary products, then it is wise to build the wording into your standard engagement agreement template. To cover ad hoc situations, there is a sample Conflict of Interest disclaimer at the end of this section.

Contents 1 Typical Common Conflicts of Interest 2 Less Obvious Conflicts 3 Other than Client Conflict of Interests 4 Marital Breakdown

Typical Common Conflicts of Interest

Some examples of situations that potentially represent conflicts of interest that should be disclosed include: · Recommending a proprietary product of your firm · Recommending a proprietary product or service if you are a shareholder · Recommending any transaction in which you are paid any type of compensation from a third party, i.e. a referral fee from a lender · Recommending the use of leverage in which you are also acting as an intermediary with respect to the sale of securities

Less Obvious Conflicts

There are other situations in which a conflict of interest may be more difficult to define. Consider an example where an advisor has been retained to develop a retirement plan for a client and one of the resulting strategies is to purchase a prescribed annuity. Consequently, the advisor obtains an annuity quote from the life company with which he or she is licensed and recommends that the client purchase that firm’s annuity.

In this situation, the client should be made aware that the advisor is acting as an “agent” order taker in recommending the purchase of an annuity with his company, rather than a “planner” carrying out a plan. The original Engagement Agreement could have contemplated this situation. However, if it did not, then the client should have been made aware of the potential conflict of interest, as the role of the advisor changed.

Other than Client Conflict of Interests

There may be situations in which the advisor could be in conflict of interest other than with a client. For example, in completing an insurance application a client may request an advisor to withhold information that would be detrimental to the underwriting. This would clearly put the advisor in a conflict. The client should be made aware of the implications of such a request. And should the client maintain their position the advisor would be obliged to terminate the relationship.

Marital Breakdown

It’s nearly inevitable, that an advisor will one day be in a situation of potential conflict of interest as the result of a client marriage breakdown. If a client couple separates or divorces, the advisor should not continue to serve both parties. The choices are:

1. Transfer both as clients, perhaps to another member of their firm; or
2. Retain one, and transfer the other;
3. This needn’t be a permanent move. After the divorce is settled one (or both) may wish to continue the relationship.

Regardless of the course of action taken, it is quite possible that the legal counsel of one or both of the parties will call upon the advisor to give testimony as to the couple’s financial situation. In this event, the advisor must present only the facts related to the financial affairs and avoid any preferential support for one party.

In summary, the best practice is to make clients aware of any situation that has the potential to represent a conflict of interest. Although acknowledgement in writing (as per the following sample) may seem just like extra paperwork, consider how much easier it is to bring it to the client’s attention as soon as the situation arises than have the client question the advisor’s integrity later.