Consultancy Conflict of Interest Dilemma

Very Hard Professional Standards Application Conflicts Of Interest

Martina is a senior investment analyst at a prominent financial advisory firm. Recently, she was approached by a friend who is starting a new venture capital fund and has asked for her insights on the potential investors in the fund. Martina’s friend is offering her a consultancy fee for both her consulting services and her influential connections in the investment community. While Martina is excited about the extra income, she knows that some of her clients might also be interested in venture capital investments and could benefit from her insights. Given the potential for conflict of interest, what should Martina consider in her decision to accept this consulting arrangement?

Martina should decline the consulting fee, as accepting it could jeopardize her objectivity and lead to real or perceived conflicts of interest.

Martina can accept the consulting fee as long as she discloses her relationship with the new fund to her current clients.

Martina can proceed with accepting the fee and engaging with her friend, but she must ensure that her advice does not favor her friend’s fund.

Hint

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