A CFP professional has been working with a client, Ms. Dubois, for several years. Ms. Dubois recently received a substantial inheritance and has expressed interest in making a sizable donation to a specific charity. Unknown to Ms. Dubois, the CFP professional's child is a senior executive at that very charity. The CFP professional believes this charity is genuinely worthy and aligns with Ms. Dubois' philanthropic goals. How should the CFP professional proceed?

Question: A CFP professional has been working with a client, Ms. Dubois, for several years. Ms. Dubois recently received a substantial inheritance and has expressed interest in making a sizable donation to a specific charity. Unknown to Ms. Dubois, the CFP professional's child is a senior executive at that very charity. The CFP professional believes this charity is genuinely worthy and aligns with Ms. Dubois' philanthropic goals. How should the CFP professional proceed?

Answer options: ✅ Disclose the familial relationship with the charity's executive, while still providing objective advice on the donation's tax implications and suitability.

• Recommend Ms. Dubois donate to a different, equally worthy charity to avoid any appearance of a conflict of interest.
• Proceed with advising on the donation as usual, as the professional believes the charity is suitable and their child's employment is irrelevant.
• Suggest Ms. Dubois seek independent advice regarding the choice of charity to avoid any personal bias.

Correct answer: Disclose the familial relationship with the charity's executive, while still providing objective advice on the donation's tax implications and suitability.

Explanation: CFP professionals must disclose all material conflicts of interest, including indirect relationships. While the charity may be suitable, the familial connection creates a potential for perceived bias. Disclosure ensures transparency and allows Ms. Dubois to consider this information when making her decision.