How should financial promotions address conflicts of interest?

Financial promotions should address conflicts of interest by implementing systems and controls designed to manage and mitigate those conflicts effectively. This approach often includes mechanisms such as "Chinese walls," which are barriers established within an organization to prevent the exchange of information between departments that could create conflicts of interest.

By having these systems in place, organizations ensure that employees are not unduly influenced by outside interests or personal relationships when making decisions that could affect clients. This aligns with regulatory expectations that organizations operate transparently and maintain high ethical standards, thereby fostering trust among clients and the public.

Establishing a framework for managing conflicts of interest proactively is essential to uphold the integrity of financial promotions. Disregarding conflicts, resolving them post-transaction, or only disclosing them when they become problematic would not meet the obligations of fairness and transparency required in financial services.