Duties of Loyalty and Care in Client Investment Management

Easy Cfa Institute Code And Standards Duties - Loyalty And Care

As a financial analyst, you are assigned to manage a client's investment portfolio. Your client has a significant interest in sustainable investing, and explicitly communicates that they want their portfolio aligned with environmental, social, and governance (ESG) criteria. However, you notice a high-return investment opportunity that does not align with ESG principles. According to the CFA Institute Code of Ethics and Standards of Professional Conduct, specifically regarding the duties of loyalty and care, which of the following actions should you take?

Invest in the high-return opportunity without informing the client, as it's your responsibility to maximize returns.

Present both the high-return opportunity and the ESG-aligned options to the client and allow them to make the final decision.

Only consider the high-return investment opportunity, regardless of the client's stated preferences.

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