Conflict of Interest

Question 1

What are the 3 principle Conflicts of Interest types?

Answer 1

Party - duty to act in the best interest of one client conflicts with duty to owed to another

(A property manager may represent multiple landlords with properties in the same area, leading to competition for tenants. In such a situation, the manager might be tempted to prioritize one client’s property over another, even if they have a duty to act in both clients’ best interests).

Own conflict - duty to act in best interests of client conflicts with own interests

(A RICS valuer might be asked to provide a market valuation for a property that they are personally interested in purchasing. The valuer’s own interest in acquiring the property could affect their impartiality and lead to an overvaluation or undervaluation, which is a conflict of interest).

Confidential - a conflict between the duty of a RICS member to provide material information to one client and the duty of that RICS member to another client in keeping that same information confidential

(A RICS member representing two bidders in a commercial property auction may be privy to each client’s bidding strategy and maximum price. Sharing this confidential information with either client would give them an unfair advantage, but withholding it could harm the other client’s interest).

Question 2

What is your firms policy on Conflicts of Interest?

Answer 2

1. Any who finds themselves in a COI must declare and disclose it for consideration by partners and the advisory board
2. Withdraw from a situation that develops into a conflict or potential conflict
3. Comply with the firms instructions and any controls imposed following disclosure of COI

Question 3

How can you identify a conflict of interest ?

Answer 3

Before taking a client instruction, ask yourself if the ability to act in the best interests of your client could potentially be impaired by;

Personal relationships
Financial interest
Commercial relationship
Interests of the firm

If believe impartiality could be comprised, there is a COI

Question 4

Please can you outline how you would carry out a conflict of interest check?

Answer 4

There is an internal COI database
Partner in charge has access to this and will check upon request

Question 5

In what circumstances if there was a COI could you proceed with an instruction?

Answer 5

If you have notified both parties and received informed consent in writing

Question 6

What is a conflict of interest?

Answer 6

COI occurs when an individual’s personal, financial or other interest interferes with their professional duty or decisions