Investment Strategy Consideration for Client with Debt

Easy Professional Standards Application Responsibilities To Clients

Jane is a financial advisor who has recently acquired a new client, Mike, who is looking to invest for retirement. During their initial meeting, Mike shares his investment goals, risk tolerance, and some personal information. Later, Jane discovers that Mike has significant debt obligations impacting his financial situation.

As Jane prepares to recommend an investment strategy, she recalls the CFA Institute's Code of Ethics and Standards of Professional Conduct. Specifically, she reflects on her responsibilities to her clients regarding the suitability of her investment recommendations.

What should Jane prioritize in developing Mike's investment strategy?

Recommending an aggressive growth strategy because it could yield the highest returns, irrespective of Mike's debt.

Creating a balanced investment strategy that considers Mike's current debt obligations and long-term goals.

Advising Mike to focus solely on paying off his debt before considering any investments.

Hint

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