Managing Conflict of Interest in Professional Roles

Medium Professional Standards Application Conflicts Of Interest

Jennifer is a portfolio manager at a mid-sized investment firm. She is currently handling a large portfolio for a high-net-worth client. Recently, she has been approached by a company that is looking for funding and has offered Jennifer a position on their board of directors, which would require her to spend significant time outside her normal responsibilities.

Jennifer believes that the position could enhance her status and provide valuable insights that might benefit her current role. However, she is also aware that by accepting the role, she could potentially influence her investment decisions regarding the client’s portfolio in favor of the company seeking her involvement.

According to CFA Institute's Code of Ethics and Standards of Professional Conduct, what should Jennifer do to address this potential conflict of interest?

Accept the board position without additional action, as it is a personal opportunity.

Disclose the board position to her client and obtain their consent prior to accepting the role.

Decline the board position as it inherently poses a conflict of interest.

Hint

Submitted9.2K

Correct5.2K

% Correct56%