Which statement best describes how conflicts of interest should be documented under FAIS?

• A. Only verbal disclosure is required
• B. Disclosures must be documented and evidence of mitigation kept
• C. No documentation is required
• D. Documentation is optional

Answer: (B)

Under FAIS, conflicts of interest must be documented along with evidence of how they were mitigated. This creates a clear, auditable trail showing that the adviser identified the conflict, disclosed it to the client, and took concrete steps to minimize any potential bias in the advice given. Keeping records of both the disclosure and the mitigation demonstrates that appropriate controls were applied and helps protect the client and the regulator by showing how the conflict was managed. Verbal disclosure alone isn’t enough, and keeping no documentation or making documentation optional would fail to meet regulatory expectations for accountability and traceability.