RegulatoryExams
Full glossary Standards

Conflict of Interest

Also known as: COI, conflict of interest management policy

Any situation where an FSP or representative’s interest may influence the objective advice given to a client.

A conflict of interest is any situation in which an FSP or representative has an actual or potential interest that may influence the objective performance of their obligations to a client, or that may prevent them from rendering an unbiased and fair financial service.

The General Code of Conduct requires every FSP to adopt, maintain and publish a Conflict of Interest Management Policy. Conflicts must be avoided where possible, and where they cannot be avoided, they must be mitigated and disclosed to the client.

Examples include receiving commissions, financial interests, ownership interests or third-party relationships that could sway the advice given.

Related terms

General Code of ConductThe binding code that sets out how FSPs and representatives must behave towards clients — fairness, disclosure and suitable advice.FAIS ActThe Financial Advisory and Intermediary Services Act, 2002 — the law that governs financial advice and intermediary services in South Africa.

Ready to pass the RE5?

Master every term like this with the guided RE5 study guide and real-style practice exams — start free today.

Start practising free Open the study guide