Standard V – Investment Analysis, Recommendations, and Actions
This standard has two parts:
A. Diligence and Reasonable Basis
This standard states that the member must exercise diligence, independence, and thoroughness while analyzing investments, making recommendations, and taking investment actions.
The member must also have a reasonable basis supported by research and investigation for investment analysis, recommendations, and actions.
B. Communication with Clients and Prospective Clients
This standard states that the members disclose their investment processes to clients and prospective clients. This includes information such as formats, investment principles, and changes in the processes, etc.
The members should reasonably identify the important factors affecting their investment processes and communicate them to their clients.
The members while presenting investment analysis to clients should distinguish between facts and opinions.
- CFA Institute Professional Conduct Program
- Six Components of the Code of Ethics
- Seven Standards of Professional Conduct
- Standard I - Professionalism (Standards of Professional Conduct)
- Standard II – Integrity of Capital Markets
- Standard III – Duties of Clients
- Standard IV – Duties to Employers
- Standard V – Investment Analysis, Recommendations, and Actions
- Standard VI – Conflicts of Interest
- Standard VII – Responsibilities of a CFA Institute Member or CFA Candidate