Which FCA principle requires the firm to manage conflicts of interest fairly?

• A. Consumer duty
• B. Manage conflicts of interest fairly
• C. Observe proper market conduct standards
• D. Client assets protection

Answer: (B)

The situation tests the FCA principle that requires a firm to handle conflicts of interest fairly. This principle is about setting up policies and controls so any situation where the firm’s own interests could influence its professional judgment is identified and managed. It means putting in place measures such as information barriers, independent decision processes when needed, and clear disclosures or consent where a conflict could affect the client. The aim is to ensure the client’s interests are not compromised and that decisions are made impartially and in good faith.

Other options touch on related areas but not this specific duty. Consumer duty concerns outcomes for consumers more broadly, not the governance of conflicts. Observing proper market conduct standards governs fair behavior in markets in general, not the explicit management of conflicts of interest. Client assets protection focuses on safeguarding client money and assets, not the internal handling of conflicts in decision-making.