What approach should an investment professional take when faced with a conflict of interest?

An investment professional should disclose the conflict of interest and seek client consent because this approach aligns with ethical standards and fosters transparency in the professional-client relationship. By openly communicating potential conflicts, the professional allows clients to make informed decisions regarding their investments. This practice helps maintain trust and integrity, which are essential in the financial industry.

Additionally, obtaining client consent after disclosing the conflict ensures that clients are aware of the circumstances affecting their investments and can weigh their options accordingly. This not only protects the interests of the client but also upholds the ethical obligations of the investment professional, emphasizing the importance of placing the client’s best interests at the forefront of all actions. Such proactive communication is fundamental in managing conflicts of interest effectively and ethically.