Loyalty to Clients in Investment Decision-Making

As an asset manager, you have been given the responsibility of managing a significant portfolio for a client who is a high-net-worth individual. Recently, you have received an investment opportunity that has the potential for significant returns but comes with elevated risks. At the same time, you are also considering a low-risk investment that aligns perfectly with your client's risk tolerance and financial goals.

The client has made it clear in previous discussions that their primary objective is capital preservation. However, the potential for high returns from the riskier investment is alluring. Discuss how you, as an asset manager, should address the issues of loyalty to the client in accordance with the CFA Institute's Asset Manager Code, focu\sing on communication, transparency, and the overall best interests of the client.