Fair Dealing in Client Portfolio Allocations

Hard Cfa Institute Code And Standards Duties - Fair Dealing

An investment advisor, Sam, handles multiple clients' portfolios, each of which has varying degrees of risk tolerance. Recently, Sam discovered a new investment opportunity that aligns perfectly with one client’s aggressive growth strategy. Eager to benefit this client, Sam also believes that this opportunity could yield substantial returns for other clients with similar risk profiles.

However, the investment is limited in availability. Sam is faced with the dilemma of choosing how to allocate this opportunity among his clients. To ensure fairness and uphold his professional integrity, Sam considers various options to distribute this investment. According to the CFA Institute Code of Ethics and Standards of Professional Conduct, what is the most appropriate course of action for Sam to take?

Allocate the investment only to the client with the aggressive growth strategy, as they are most likely to benefit from it.

Allocate the investment proportionally to all clients based on their respective portfolio sizes.

Evaluate all clients' portfolios to identify those with a similar risk profile and allocate the investment equally among them.

Hint

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