What should a fiduciary do if they have a conflict of interest?

The appropriate course of action for a fiduciary dealing with a conflict of interest is to consult with the beneficiary and act transparently. This approach is fundamental to maintaining trust and upholding the fiduciary's duty to act in the best interest of those they represent.

Transparency is critical in these situations because it allows the beneficiary to understand the nature of the conflict and to make informed decisions regarding the matter. By consulting the beneficiary, the fiduciary acknowledges the potential impact of the conflict and seeks to ensure that any decisions made do not unfairly benefit the fiduciary at the expense of the beneficiary. This fosters open communication, promotes ethical conduct, and helps to preserve the integrity of the fiduciary relationship.

In essence, addressing conflicts of interest with transparency not only adheres to legal and ethical standards but also reinforces the fiduciary’s responsibility to prioritize the best interests of the beneficiary above their own. Such actions build trust and help to prevent potential legal issues that could arise from unaddressed conflicts.