A conflict of interest occurs when an individual or a firm has an incentive to serve one interest at the expense of another interest or obligation. The source of those conflicts is often an investment adviser’s own employees. For example, if an employee’s close relative owns a company in which the adviser invests client funds, it could create a conflict of interest. Investment advisers owe a fiduciary duty to their clients that obligates them to either eliminate any conflicts of interest or to mitigate and disclose them. To fulfill that duty, advisers must know about any existing or potential conflicts of interest created by employees’ outside business activities or relationships. Advisers can use conflicts of interest questionnaires to gather information from employees on common situations and relationships that may give rise to a conflict. This two-part series details the fundamentals of conflicts of interest questionnaires. This first article explains why investment advisers should use conflicts of interest questionnaires and describes the areas the questionnaires should cover. The second article will outline how to use conflicts questionnaires, including who should be required to complete them, when they should be completed and how advisers should use the information gathered on these forms. See “OCIE Risk Alert on Private Funds: Focus on Conflicts; Fees and Expenses; and MNPI (Part One of Two)” (Aug. 25, 2020); and “Navigating the SEC’s Interpretation Regarding an Investment Adviser’s Standard of Conduct: Three Tools to Systematically Monitor Conflicts of Interest (Part Three of Three)” (Dec. 17, 2019).