Client Misrepresentation Ethical Dilemma

Hard Professional Standards Application Ethical Decision-making

During a routine review of client accounts, you, as a senior financial advisor, discover that one of your junior analysts has been...

...incorrectly representing the performance of certain investments to clients, potentially inflating expected returns in client communications. This misrepresentation could lead to misguided client decisions based on unrealistic expectations. As the senior advisor, you are faced with an ethical dilemma regarding how to handle this situation. You are aware that reporting this issue may harm your junior analyst's career but failing to act could mislead clients.

Confront the junior analyst privately, allowing them to correct their mistake before escalating the issue.

Report the issue to the firm's compliance department immediately, as client interests must come first.

Ignore the issue since it is a minor discrepancy and does not have a significant impact on overall client portfolios.

Hint

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