How can a broker best manage conflicts of interest?

A broker can best manage conflicts of interest by being transparent and disclosing any potential conflicts to clients. This approach builds trust and ensures that clients are fully informed about any situations that may affect their interests. When a broker clearly communicates potential conflicts, clients can make informed decisions regarding their options and the level of risk they are willing to take.

Transparency is essential for maintaining the integrity of the broker-client relationship. It not only helps to manage expectations but also demonstrates the broker's commitment to ethical practices. Clients appreciate honesty and are more likely to feel secure in their decisions when they understand the potential conflicts that may arise.

The other options do not effectively address conflict management. Ignoring potential conflicts can exacerbate trust issues and lead to ethical problems, while charging clients more does not solve the issue and can lead to dissatisfaction. Avoiding client interactions is counterproductive, as it limits communication and does not address conflicts when they arise. Being proactive in disclosing conflicts promotes a positive and transparent relationship, essential for effective brokerage practice.