Conflicts of Interest in Financial Planning Practice

Bearden, Frank C.
February 2002
Journal of Financial Planning;Feb2002, Vol. 15 Issue 2, p86
Academic Journal
This article discusses possible conflicts of interest in financial planning. The author reviews the treatment of conflicts of interest by three professional organizations in their codes of practice. A conflict of interest is the incompatibility a professional confronts when performing competent, thorough service for a client while balancing the private interests of the professional with those of that client. Professionals depend on their perceptive and cognitive abilities to fully understand a client's concerns and situation. These same faculties allow the professional to make appropriate recommendations. Hence, an effective client relationship with a professional, such as an attorney or a financial planner, must be as unencumbered as possible with nonprofessional concerns. The professional should have as little distraction as possible when using his skills on the client's behalf. Conflicts of interest provide just such a distraction, potentially damaging both the professional relationship of trust and the quality of work provided.


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