Standard III – Duties of Clients

This standard has 5 parts:

A. Loyalty, prudence, and Care

Members have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment. Members and Candidates must act for the benefit of their clients and place their clients’ interest before their employer’s or their own interest.

B. Fair Dealing

Members and Candidates must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.

C. Suitability

  1. Before making an investment recommendation or action, the members must reasonably enquire into the client’s investment experience, his risk/return objectives, and any limitations.
  2. Before making an investment recommendation or action, the members must determine that the investment being advised is suitable for the client in terms of the client’s objectives, financial goals, and limitations.
  3. The member must also ascertain whether the investment being recommended is suitable in context of the client’s overall portfolio.

D. Performance Presentation

The members must ensure that the investment performance being communicated to the clients is fair, accurate, and complete.

E. Preservation of Confidentiality 

The members must maintain the confidentiality of all their clients’ information (pas, current, or prospective), unless there is some illegal activity, a requirement from the law, or the client itself permits disclosure.

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