What Is Conflict of Interest?
A situation where a representative's personal financial interests (such as bonuses or incentives) may conflict with the client's best interests. The series 7 requires representatives to disclose and manage conflicts rather than ignore them.
Conflict of Interest across 4 exams
Conflict of Interest appears on the following exams. Each defines it in the context candidates are tested on:
- Series 7
- A situation where a representative's personal financial interests (such as bonuses or incentives) may conflict with the client's best interests. The series 7 requires representatives to disclose and manage conflicts rather than ignore them.
- PA Notary
- A situation where a notary has a personal or financial relationship with a party to the transaction that could bias their judgment. Pennsylvania law prohibits notaries from notarizing documents when they are named as a beneficiary or have a direct financial stake in the outcome.
- Series 66
- A situation where a financial professional's personal interests, financial incentives, or relationships may compromise their duty to act in a client's best interest; must be disclosed in writing. The Series 66 heavily emphasizes identifying, disclosing, and managing conflicts of interest as a core fiduciary responsibility.
- Series 24
- A situation in which a representative or firm has competing financial incentives that could compromise its duty to act in a customer's best interest. Principals must identify and manage conflicts through disclosure, policies, and supervision of potentially problematic transactions.