Section 1
Purpose
A conflict of interest arises when a QS's duty to act in the best interests of one client conflicts — or may be seen to conflict — with their duty to another client, or with a personal interest. Managing conflicts of interest properly is a fundamental professional obligation.
The RICS Conflicts of Interest Professional Statement (1st edition, effective 1 January 2018) sets out the mandatory requirements that all RICS members and regulated firms must follow globally.
Section 2
Key Principles
- The Conflicts of Interest Professional Statement identifies two main types: (1) Own Interest Conflict — where the firm's own interests conflict with a duty to a client; (2) Confidential Information Conflict — where information held about one client could disadvantage another.
- Party Conflicts arise when the firm acts for two or more parties with opposing interests on the same or related matter.
- RICS requires that firms have documented systems and controls for identifying, recording, and managing conflicts of interest.
- Informed Consent: where a conflict is identified, the firm may be able to proceed with the written informed consent of all affected parties — but only if the conflict is manageable and both parties fully understand the situation.
- Some conflicts cannot be resolved by consent alone. Where there is a risk that confidential information held for one client would materially disadvantage another, an Information Barrier (Chinese Wall) must be established — but this is only effective in larger firms with properly implemented procedures.
- KYC (Know Your Client) and AML (Anti-Money Laundering) checks are part of the due diligence process and must be completed before accepting a new instruction.
Section 3
Practical Application
Step 1
Before accepting any new instruction, run the prospective client's name and the project details through your firm's conflicts register.
Step 2
If a potential conflict is identified, assess its nature: is it manageable (with informed consent), or is it a conflict where you must decline to act?
Step 3
If manageable: obtain written informed consent from all affected parties before proceeding. Record this in the conflicts register and on the project file.
Step 4
Complete KYC checks: verify the client's identity, ownership structure (for companies), and the source of funds where relevant. Use Companies House and other public records.
Step 5
Complete AML checks where your firm operates in the regulated sector (check whether your services are caught by the Money Laundering Regulations 2017 as amended).
Step 6
Document all conflict checks and due diligence outcomes on the project file before commencing work.
Section 4
Common Mistakes to Avoid
- Not running a conflict check before accepting an instruction — this is a fundamental compliance failure.
- Assuming that because a conflict has not caused a problem before, it does not need to be addressed.
- Obtaining verbal consent for a conflict rather than written informed consent.
- Failing to maintain a conflicts register — RICS regulatory visits frequently identify this as a compliance gap.
- Not completing KYC/AML checks for new clients — increasingly a regulatory requirement regardless of firm size.
Section 5
APC Competency & Quick Reference
This topic is relevant to: Business Management (Level 1–2), Client Care (Level 1–2), RICS Rules of Conduct, Ethics & Professional Practice.
What are the two main categories of conflict of interest under the RICS Professional Statement?
Own Interest Conflicts (where the firm's interests conflict with its duty to a client) and Confidential Information Conflicts (where information held about one client could disadvantage another). Party Conflicts are a sub-category where the firm acts for two opposing parties.
What is "informed consent" in the context of conflicts of interest?
Informed consent is written confirmation from all affected clients that they understand the nature of the conflict and consent to the firm continuing to act. It is only valid if each party has been given sufficient information to understand the conflict fully, and it does not override the firm's professional judgment about whether acting for both parties is appropriate.
What due diligence checks must be completed before accepting a new instruction?
A conflict of interest check against the firm's register; KYC checks to verify the client's identity and, for corporate clients, their ownership structure; and AML checks where the firm operates in the regulated sector. All checks must be documented on the project file.
Section 6
Pre-Appointment Checklist
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Conflicts of interest check run against firm's register before accepting instruction
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Result of conflict check documented on project file
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Written informed consent obtained (where a manageable conflict identified)
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KYC checks completed — client identity and ownership verified
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AML checks completed where applicable (regulated sector)
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All due diligence outcomes documented on the project file
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Conflicts register updated to include the new instruction
Section 7
CPD Learning Outcomes
- Identify the key categories of conflict of interest and the circumstances in which informed consent may or may not be sufficient.
- Apply KYC and AML due diligence procedures before accepting a new instruction.
- Maintain a conflicts register and file evidence that demonstrates compliance with the RICS Conflicts of Interest Professional Statement.
Section 8
Further Reading
- RICS Conflicts of Interest Professional Statement (1st edition, effective 1 January 2018)
- RICS Rules of Conduct (Global, October 2021)
- Money Laundering Regulations 2017 (as amended)
- RICS Anti-Money Laundering Guidance Note
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