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AcadiFi
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DisclosureCheck2026-05-21
cfaLevel IEthical and Professional Standards

Do conflicts have to be disclosed before making a recommendation?

If an analyst or adviser believes the recommendation is still suitable, can they disclose a conflict later in the process?

41 upvotes
AcadiFi TeamVerified Expert
AcadiFi Certified Professional

Material conflicts should be disclosed clearly and in time for the client or employer to evaluate the conflict. A recommendation does not become clean simply because it was well researched or ultimately profitable.

For example, if an adviser receives a referral fee from a fund sponsor, the client needs to know about that arrangement before or at the time the recommendation is made. The disclosure helps the client judge whether the adviser's objectivity may be affected.

Late disclosure is usually weak because it does not help the client evaluate the recommendation when the decision is being made.

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