Responsibilities to Clients in Investment Advising

Medium Professional Standards Application Responsibilities To Clients

Emma is a CFA charterholder working at a reputable investment firm. She has been tasked with advising a new client, Mr. Smith, who is looking to invest a substantial amount of capital. During their first meeting, Mr. Smith shares his investment preferences, including a strong aversion to any investments linked to fossil fuels due to personal beliefs.

Emma notices that her firm has a range of investment products that include a focus on sustainable investing, which aligns well with Mr. Smith's preferences. However, one product offered by her firm involves making significant investments in the oil and gas sector in the short term, but promises high returns in the long run.

As Emma prepares to recommend investment options to Mr. Smith, she is conflicted about how to proceed given the differing strategies available. What should Emma do to best uphold her responsibilities to Mr. Smith?

Recommend the high-return product despite Mr. Smith's aversion, as it may be beneficial in the long run.

Prioritize Mr. Smith's preferences and only recommend sustainable investment options that avoid fossil fuels.

Provide Mr. Smith with detailed information on both types of products, allowing him to make his own informed decision.

Hint

Submitted1.4K

Correct1.1K

% Correct77%