Level III Core · Guidance for Standard VI: Conflicts of Interest

Standard VI(A): Avoid or Disclose Conflicts of Interest

Updated 9 October 2026

Standard VI(A) requires Members and Candidates to make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with duties to clients, prospective clients and employer. Disclosure must be prominent, in plain language and communicate the relevant information effectively. Avoidance is best practice, not a Standard requirement.

Understand Standard VI(A): Avoid or Disclose Conflicts

A conflict of interest exists when your own interests, or those of someone else you owe a duty to, could pull you away from acting in a client's or employer's best interest. The conflict itself is not always a violation. Failing to disclose it properly is.

Standard VI(A) says you must make full and fair disclosure of all matters that could reasonably be expected to impair your independence and objectivity, or interfere with your duties to clients, prospective clients and your employer. You must make sure the disclosure is prominent, delivered in plain language, and communicates the relevant information effectively, so the recipient can judge your objectivity for themselves.

The Standard's requirement is disclosure. It does not say you must avoid every conflict. The guidance recommends avoiding a conflict as a best practice where you can, but that is not a Standard requirement. If a conflict cannot be managed through disclosure, stepping away or removing the conflict is a prudent option.

The test for whether a matter must be disclosed comes from the Standard's own wording: could it reasonably be expected to impair your independence and objectivity or interfere with your duties? It is not whether you personally feel biased. Apply that wording to the facts in the vignette rather than looking for a fixed list of situations.

Disclosure goes to two audiences. Clients and prospective clients need to know about conflicts that bear on the advice or services they receive. Your employer needs to know about conflicts that could interfere with your work for them. The guidance recommends that disclosure to the employer be in writing and detailed enough for the employer to judge whether the situation is acceptable.

Key rules to remember

Core rule: Make full and fair disclosure that is prominent, in plain language and communicates the relevant information effectively; Disclosure is the Standard's requirement. It applies to matters that could reasonably be expected to impair independence and objectivity or interfere with duties to clients, prospective clients and employer. Avoiding a conflict is recommended in the guidance as best practice, not required by the Standard.
Quality of disclosure: Prominent + plain language (Standard text); specific enough to be understood (guidance); The Standard requires prominent, plain-language disclosure that communicates the information effectively. The guidance adds that boilerplate or buried wording does not give the recipient what they need.
Disclosure to clients: Disclose conflicts that bear on the advice or service, including ownership and compensation arrangements; Covers prospective clients too, not only existing clients.
Disclosure to employer: Disclosure to the employer, recommended in writing and detailed enough for the employer to judge the conflict; The guidance recommends written, detailed disclosure. It lets the employer decide whether to permit, restrict or prohibit the activity.
Test for a conflict: Standard wording: could the matter reasonably be expected to impair independence and objectivity or interfere with duties?; If yes, disclose. Where a conflict cannot be managed, avoiding it is a prudent option, but the Standard does not require avoidance.

How to solve Standard VI(A): Avoid or Disclose Conflicts questions

Use this sequence on any Standard VI(A) item set or essay. It keeps you on the rule and stops you from over-reading the facts.

1Identify the interests in play: yours, your employer's, the client's, and any third party's.
2Ask whether the situation could reasonably be expected to impair independence and objectivity or interfere with duties, which is the Standard's own wording. If not, there is no conflict to disclose.
3Decide who is affected: clients, prospective clients, the employer, or all of them.
4Check what was disclosed: was it full, fair, prominent, plain and made to the right party? For the employer, was it detailed enough and, as the guidance recommends, in writing?
5If disclosure cannot restore objectivity, avoiding or removing the conflict is a prudent option under the guidance. It is not a Standard requirement, so choose it only where the facts show the conflict cannot be managed.
6Judge timing. Disclosure should come before the advice or service is relied on, not after.
7State the conclusion in the command word's form: violated or not violated, then the action required, with a one-line reason.

Quickest way: Three-question screen for VI(A)

When to use it: Use when you have about two minutes for a multiple-choice question and the vignette is long.

Is there a possible impairment of objectivity or duty? If no, answer not a violation.
Was it disclosed to the right party, clearly and in time? If yes, usually no violation.
If not disclosed, the answer is the action that discloses it, or removes it if disclosure cannot cure it.

Common mistakes in Standard VI(A): Avoid or Disclose Conflicts

Believing any conflict is a violation
The word conflict sounds like wrongdoing.
Fix: The violation is failing to disclose properly. A disclosed, manageable conflict is generally acceptable.
Treating disclosure as a cure for everything
Students over-learn the word disclose.
Fix: Where the conflict is so serious that objectivity cannot be restored, avoid or remove it. Disclosure alone is not enough.
Accepting vague or buried disclosure
Students see the word disclosed in the vignette and stop reading.
Fix: Check that it was prominent and in plain language, as the Standard says. The guidance adds that it should be specific. Boilerplate in fine print does not give the recipient what they need.
Disclosing only to clients and forgetting the employer
Client duties feel more central than employer duties.
Fix: Standard VI(A) covers clients, prospective clients and the employer. Identify whom the conflict affects and who must be told. The guidance says employer disclosure should be in writing and detailed.
Confusing VI(A) with VI(B) and VI(C)
All three sit under conflicts of interest.
Fix: VI(A) is general disclosure of conflicts. VI(B) deals with priority of transactions. VI(C) deals with referral fees. Match the facts to the correct standard.

Worked examples

Example 1

An analyst at an asset manager covers a listed company. Her spouse sits on that company's board. She publishes a buy recommendation and says nothing about the board seat. Has she violated Standard VI(A)? What should she have done?

Show the solution

Identify the interests: the analyst's household has a link to the company she recommends.
Test for impairment: a reasonable reader could think her objectivity may be affected by the board seat.
Check disclosure: she made none to clients or her employer.
Conclude: this is a violation because a matter that could impair objectivity was not disclosed.
Remedy: disclose the relationship to her employer, preferably in writing as the guidance recommends, and to the recipients of the report. If objectivity still cannot be assured, she should stop covering the company.

Answer: Yes, she violated Standard VI(A). She should have disclosed the board relationship to her employer and to report recipients, and stepped away from coverage if disclosure could not preserve objectivity.

Example 2

A portfolio manager's bonus rises if clients are placed in the firm's own funds. He recommends a firm fund to a prospective client and states in a short note, in large type on the first page of the proposal, that his compensation is higher when clients invest in the firm's funds. Is this consistent with Standard VI(A)?

Show the solution

Identify the conflict: his pay depends partly on which product the client buys.
Test for impairment: this could reasonably affect his recommendation.
Check disclosure: the note is prominent, in plain language, and specific about the pay link.
Check the audience: a prospective client is covered by the standard and has been told.
Check timing: the disclosure is in the proposal, before the client decides.

Answer: Yes, it is consistent with Standard VI(A). The conflict is disclosed in a full, fair, prominent and timely way to the prospective client. He must still make sure the recommendation is suitable under the other standards.

Exam tips

Read the command word. If it asks what the member should do, give the action: disclose, or disclose to the employer (ideally in writing and in detail). Add avoiding or removing the conflict only if the facts show it cannot be managed.
Quote the trigger in one phrase: could reasonably be expected to impair independence and objectivity.
In an item set, check who received the disclosure and when. Wrong audience or late timing often decides the answer.
Disclosure is what the Standard requires. Do not pick avoidance over disclosure unless the facts show disclosure cannot restore objectivity.
Keep essay answers short: state violated or not, name the standard, give one reason, then the corrective action.

Standard VI(A): Avoid or Disclose Conflicts: frequently asked questions

What does Standard VI(A) require?

It requires full and fair disclosure of all matters that could reasonably be expected to impair independence and objectivity or interfere with duties to clients, prospective clients and the employer. Disclosure must be prominent, in plain language and communicate the relevant information effectively. The guidance recommends avoiding the conflict as best practice, but the Standard itself does not require it.

Is having a conflict of interest a violation of the Code and Standards?

No, not by itself. The violation is failing to disclose the conflict properly. A conflict that is fully and fairly disclosed, and that does not prevent you from acting objectively, is generally acceptable.

Who must receive the disclosure under Standard VI(A)?

Clients and prospective clients must be told about conflicts affecting the advice or service they get. Your employer must be told about conflicts that could interfere with your duties to them, and the guidance recommends this be in writing and in enough detail to judge the situation. The affected party should receive it in a form they can understand.

How is VI(A) different from VI(B) and VI(C)?

VI(A) is the general rule on disclosing conflicts. VI(B) covers the priority of transactions, so clients and employers come before your personal trades. VI(C) covers disclosure of referral fees.