If a CFP has a close family relationship with a client or colleague, what must be done to maintain ethics?

• A. Continue as normal.
• B. Disclose the relationship; recuse from decisions where bias could occur; or seek independent arrangement; maintain fairness.
• C. End the relationship.
• D. Avoid all communications.

Answer: (B)

Having a close family relationship with a client or colleague can create a real risk that personal ties influence professional judgment. The ethical answer is to be transparent about the relationship, step back from decisions where bias could affect outcomes, and arrange for an independent arrangement to preserve fairness. Disclosing the relationship allows all parties to be aware of the potential bias; recusing from decisions where bias could occur prevents your personal ties from shaping recommendations or actions; seeking an independent arrangement brings objectivity into the process and protects the client’s interests; and maintaining fairness means treating the client no differently from others and avoiding any preferential treatment. This approach upholds fiduciary duties and professional standards. Simply continuing as normal, ending the relationship, or avoiding all communications do not adequately address the risk of bias or protect the client’s interests.