Navigating Conflicts of Interest in Portfolio Management

John Smith is a portfolio manager at XYZ Asset Management, a firm that specializes in managing high-net-worth accounts. Recently, he has received an unsolicited offer from a company that he has been analyzing for a potential investment. The company is offering John a lucrative consulting opportunity that could significantly enhance his personal income. However, John is aware that his investment decision in his clients' portfolios could be influenced by this personal financial gain.

According to the CFA Institute's Code of Ethics and Standards of Professional Conduct, portfolio managers have a duty to act in the best interests of their clients and to avoid conflicts of interest. In this case, John must consider how to navigate his newfound opportunity while being mindful of his ethical obligations to his clients.

Discuss the ethical considerations John must evaluate before accepting the offer. Detail the potential conflicts of interest that could arise and explain how John should address these issues to adhere to his duties to clients.