Loyalty to Clients and Conflicts of Interest

Easy Asset Manager Code Loyalty To Clients

As a portfolio manager at a mid-sized asset management firm, you are tasked with allocating your clients' funds between various investment opportunities. During your analysis, you come across an investment that appears to have good potential returns. However, it is also associated with a personal connection you have, as a close friend is the CEO of the company in question.

According to the CFA Institute's Asset Manager Code, how should you act in this situation to maintain loyalty to your clients?

Invest in the company to benefit your personal relationship, as your clients trust your judgment.

Disclose your personal connection to the clients to ensure transparency and avoid potential conflicts of interest.

Avoid investing in that company to eliminate any potential bias or appearance of conflict.

Hint

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