Under the Conflicts of Interest standard, which requirement is specified?

• A. Disclose, as required by law, those conflicts interfering with their professional duties.
• B. Disclose, as appropriate, any benefit paid to others for the recommendation of products.
• C. Seek employer approval before prioritizing their investment transactions over those clients.
• D. Prioritize personal transactions over client transactions by default.

Answer: (B)

The key idea is transparency about incentives that could bias the advice you give. When there are third-party payments or benefits paid to others in exchange for recommending a product, you must disclose that arrangement to clients (and your employer or relevant parties) as appropriate. This helps clients understand any potential influence behind the recommendation and assess its objectivity.

For example, if a fund manager pays a referral fee to a broker for directing clients to that fund, you would disclose this arrangement before making or continuing the recommendation. The phrase “as appropriate” recognizes that disclosure is required for material conflicts that could influence judgment, while not every minor relationship needs disclosure.

Other options don’t fit because they either focus on legal disclosure rather than professional disclosures of conflicts, or they describe practices that would undermine client interests (prioritizing personal trades over clients by default or seeking explicit approval to do so).