James and the Client's Gift Scenario

James is a charterholder and works for a financial advisory firm. He recently received a substantial gift from a client, who is also a close family friend. The client insists that the gift is a token of appreciation for the years of advice and support. However, the firm's compliance officer has raised concerns about the potential conflict of interest this gift could create. In accordance with the CFA Institute's Code of Ethics and Standards of Professional Conduct, which of the following actions should James take to demonstrate his duty of loyalty and care?