CFA Level 1 | sksddzb | Question Investment Advisor and C...

Ethical and Professional Standards

Investment Advisor and Conflict of Interest Disclosure

Very Hard Cfa Institute Code And Standards Conflicts - Disclosure

As an investment advisor at a financial services firm, you have been working with a client who is considering investing in a new technology company, TechFuture Inc. Recently, you were offered stock options in TechFuture Inc. as part of a compensation package for a consulting project you are working on outside of your advisory role. You have disclosed this potential conflict of interest to your compliance department. However, you also have a personal relationship with one of TechFuture Inc.'s executives, which you did not disclose.

What should you do regarding the investment recommendation you make to your client about TechFuture Inc.?

Proceed with your recommendation as planned, since you have disclosed the stock options to the compliance department.

Refrain from recommending TechFuture Inc. to your client until you fully disclose your personal relationship with the executive.

Only mention the stock options to your client as a potential conflict but not the personal relationship.

Hint

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