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Professional responsibilities

Conflicts of interest

The principle of good faith includes the concept of ‘undivided loyalty’. That is, the adviser owes a duty to his or her client to act in the client’s best interests, free from any competing loyalties to anyone else, including themselves.

A conflict of interest arises when an adviser’s own interests, or the interests of another client of the adviser, may influence the adviser’s judgement or actions towards a client. A conflict may arise between the adviser and the client or between the client and another client of the adviser’s.

Clause 5:

Where a licensed immigration adviser is aware that there is a potential or actual conflict of interest relating to the client, including the existence of any financial or non-financial benefit the adviser will receive as a result of the relationship with the client, the adviser must disclose the potential or actual conflict to the client in writing.

A client must be advised in writing of any potential or actual conflict of interest relating to them. This can be achieved by referring to the actual or potential conflict in the written agreement with the client.

The adviser should explain to the client as fully as possible what they believe the actual or potential conflict of interest is.

Clause 5 highlights that any financial or non-financial benefit that an adviser will receive as the result of their relationship with the client is an actual or potential conflict of interest. The existence of this benefit must be disclosed to the client in writing. Advisers should carefully consider what they need to disclose on a case by case basis with a view to being as transparent as possible in the circumstances.

What has changed compared to the 2010 Code?

2010 Code – required that any financial and non-financial interests in goods or services be disclosed to their client but was located under Disclosure. It was not clear how this related to the conflict of interest clauses.

2014 Code – requires that any potential or actual conflict of interest, including the existence of any financial or non-financial benefit the adviser will receive as a result of the relationship with client, be disclosed to the client. This makes it clear that having a financial or non-financial benefit resulting from the relationship with the client is a conflict of interest and must be treated as one.

Clause 6:

Where a licensed immigration adviser is aware that there is a potential or actual conflict of interest relating to the client, the adviser may only represent or continue to represent the client where the client gives written consent.

Clause 6 follows on from the requirement to disclose any conflict to the client in writing. The next step is that the client must give consent in writing if they still want to engage the services of the adviser.

The duty to disclose a potential or actual conflict or interest is on-going, and if the adviser’s situation changes at any time, they must inform their client, make any necessary changes to the written agreement and seek written confirmation from all parties to the agreement that they accept the change.

Where there is a potential or actual conflict of interest and the client has been informed of this in writing, the client must give written consent to proceed with the services.

Clause 7:

A licensed immigration adviser must not in any circumstances represent or continue to represent the client where they are aware that there is an actual conflict of interest that means:

  1. the adviser’s objectivity or the relationship of confidence and trust between the adviser and the client would be compromised, or
  2. the adviser would breach the confidentiality of a client.

Where conflicts of interest arise, an adviser must address these on a case by case basis, bearing in mind all relevant contract(s) and written agreement(s) that have been entered into as well as the Code.

In some situations a conflict of interest may mean that the adviser can no longer represent the client.

Both provisions under clause 7 are requirements elsewhere in the Code - 7(a) is covered under clause 2(a) and 7(b) is covered under clause 4(a). Clause 7(a) reiterates that these requirements must be taken into consideration whenever an actual conflict of interest is identified.

If an adviser finds that an actual conflict of interest would mean that their objectivity would be compromised or that the relationship of confidence and trust with the client would be compromised, then the adviser has a choice; either:

The same is true if the adviser finds that disclosing a conflict of interest to a new client would breach the confidentiality of an existing client. Unless the existing client consents to the confidential information being disclosed to the new client, the adviser must not act or continue to act for the new client.

Here is a decision from the Immigration Advisers Complaints and Disciplinary Tribunal that refers to conflicts of interest:

Moctezuma v Chase-Seymour

Penalty Decision: [2013] NZIACDT 40 (26 June 2013) (PDF, 151 KB)

What has changed compared to the 2010 Code?

2010 Code – allowed the adviser to act for the client in any situation where there was a conflict of interest providing that the client agreed

2014 Code – prevents an adviser from acting or continuing to act for the client if:

  1. the adviser’s objectivity or the relationship of confidence and trust between the adviser and the client would be compromised, or
  2. the adviser would breach the confidentiality of a client.