What is typically included in an indirect conflict of interest?

In the context of fiduciary duties, an indirect conflict of interest arises when a fiduciary’s decisions or actions are influenced by interests or relationships that may not be immediately apparent but can still create a conflict. The choice regarding clients with conflicting interests from hired professionals embodies this concept effectively. This scenario illustrates how the interests of clients can indirectly conflict, particularly when a fiduciary, who may be representing one client, has to consider the interests of another client or party involved.

In these cases, the fiduciary must navigate the potential for bias or divided loyalty that arises from their professional relationships and commitments. Properly addressing these conflicts is essential for maintaining trust and integrity in fiduciary practices. Recognizing and managing indirect conflicts allows fiduciaries to fulfill their obligations in a manner that prioritizes the interests of their clients without compromising ethical standards.