Taken from Policy Manual Part D: Professional Practice.
The principle of good faith includes the concept of “undivided loyalty”. That is, the adviser owes a duty to his or her client to act in the client’s best interests, free from any competing loyalties to anyone else.
A conflict of interest arises when interests of your own, or another client of yours, may influence your judgement or actions towards a client.
Clause 6 of the code of conduct sets out the requirements on advisers in relation to actual or potential conflicts of interests, and can be read as follows:
Advisers and clients can enter into an agreement where there is a conflict of interest only if both parties agree in a written agreement that acknowledges the conflict of interest.
Where conflicts of interest arise, an adviser must address these on a case by case basis, bearing mind all relevant contract(s) and written agreement(s) that have been entered into as well as the code of conduct.
In some situations this may mean that the adviser can no longer represent the client. Where this situation eventuates, other relevant provisions of the code of conduct to consider are: