Duty of Suitability in Retirement Planning

Very Hard Cfa Institute Code And Standards Duties - Suitability

As a financial advisor, you receive a request from a new client who expresses a strong interest in investing in high-risk, high-return tech startups. However, through your discussions, you discover that the client is nearing retirement and has a significant portion of their savings already locked in low-risk investments such as government bonds.

According to the CFA Institute Code of Ethics and Standards of Professional Conduct, particularly regarding the Duty of Suitability, how should you proceed in this situation to align with professional standards?

Invest a small portion of the client's funds in high-risk tech startups while maintaining a majority in low-risk bonds.

Decline to manage the client's portfolio and refer them to another advisor who specializes in high-risk investments.

Construct a diversified portfolio that accommodates the client's interest in tech startups while prioritizing their retirement needs.

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