Duty of Loyalty and Care in Client Relationships

Very Easy Cfa Institute Code And Standards Duties - Loyalty And Care

As a CFA charterholder, you hold a special responsibility toward your clients. Consider the following scenario:

Sam, a CFA charterholder, has a client who is interested in investing in a new startup. However, Sam knows that he has a personal interest in the startup, as he holds shares in it. What should Sam prioritize in this situation according to the CFA Institute Code of Ethics and Standards of Professional Conduct?

Sam should disclose his personal interest to his client and take steps to ensure that his advice is not influenced by this interest.

Sam can provide advice without disclosing his personal interest since it is irrelevant to his client.

Sam should advise his client against investing in the startup to avoid any appearance of conflict.

Hint

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