Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What does 'self-dealing' refer to in fiduciary duties?

1. Using client information for personal gain

2. Avoiding conflicts of interest

3. Complying with all regulations

4. Engaging in fair dealings

The correct answer is: Using client information for personal gain

In the context of fiduciary duties, 'self-dealing' specifically refers to the act of using client information or resources for personal gain, which illustrates a breach of trust inherent in the fiduciary relationship. A fiduciary is expected to act in the best interests of their client, meaning they must prioritize the client’s needs and interests above their own. If a fiduciary engages in self-dealing, they are placing their own interests over those of their client, potentially benefiting financially or otherwise at the expense of the client. This behavior is not just unethical; it may violate legal obligations tied to the fiduciary’s duties, which emphasize loyalty, full disclosure, and the avoidance of conflicts of interest. Overall, self-dealing is counterproductive to the essence of fiduciary responsibility, which requires maintaining the highest standard of trust and confidence in the client relationship.