Dual Role Disclosure in Client Management

Very Hard Professional Standards Application Responsibilities To Clients

Clara, a CFA charterholder, is a senior portfolio manager at a prominent investment firm. She recently inherited a significant portion of her family's estate, which includes a diverse set of investment assets and properties. Clara's mother, who is the primary beneficiary of the estate, has asked Clara to prioritize investments from the estate in a manner that maximizes short-term returns.

While evaluating various investment opportunities, Clara comes across a lucrative project that requires a significant upfront investment and is aligned with her investment philosophy. However, Clara also knows that some of her current clients have moderate-risk profiles and prioritize sustainable returns over aggressive growth. She feels a sense of obligation to consider her mother's interests while also adhering to the investment mandates of her clients.

Before executing the investment from the estate, Clara deliberates whether she should disclose to her clients her potential dual role as a beneficiary of the estate that is making investments. What course of action should Clara take in line with her ethical responsibilities?

Clara should fully disclose her interest and the circumstances of her dual role to all affected clients to ensure transparency.

Clara should not disclose her dual role since it is a personal matter and could be considered irrelevant to the clients' investment decisions.

Clara should only disclose her dual role to her mother but not to her other clients, as her mother's investments should remain confidential.

Hint

Submitted13.5K

Correct7.5K

% Correct56%