Professional Ethics and Broker Responsibilities
Duties owed
A licensed broker owes the client competence, diligence, confidentiality, and loyalty, and owes the government accuracy and candor. The broker must not file an entry it knows or should know is false, must correct errors promptly, and must not use a client's ignorance to inflate fees or conceal mistakes. Conflicts of interest - such as representing both buyer and seller with adverse interests - must be disclosed and managed.
Concepts to master
Power of attorney scope and its limits; the duty to advise clients on recordkeeping and reasonable care; the obligation to decline or withdraw from unlawful instructions; confidentiality exceptions where disclosure is legally required; and the distinction between an honest error promptly corrected and a concealed violation.
Traps
Questions sometimes suggest following a client's instruction to misdeclare value. The correct answer is refusal plus documentation. Another trap is assuming confidentiality permits silence when the law requires disclosure. Watch for scenarios where a broker continues a relationship after discovering fraud.
Rule of thumb
When client instruction conflicts with legal duty, the legal duty wins; document the advice, the refusal, and the escalation.
Worked example
A client asks the broker to understate invoice value to reduce duty. The broker must refuse, explain the legal exposure, and, if the client persists, decline the engagement and consider reporting obligations under applicable law.