Client Responsibilities and Transparency

Easy Professional Standards Application Responsibilities To Clients

As a CFA charterholder, you have an obligation to prioritize your clients' interests. You are currently managing a portfolio for a high-net-worth individual who is concerned about market volatility. While discussing investment options, you suggest a hedge fund that charges a significantly higher fee than traditional investments. You believe the hedge fund could better serve the client's long-term goals, despite its cost.

Which of the following represents your best course of action regarding your responsibilities to the client?

Recommend the hedge fund without disclosing the fee structure to the client.

Discuss both the potential benefits of the hedge fund and the high fees, ensuring the client understands all aspects before making a decision.

Advise the client to invest in lower-cost index funds instead, regardless of the client's investment goals.

Hint

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