Chartered Financial Analyst Level 1
Get started today
Ultimate access to all questions.
Mary Lorraine, CFA, is a portfolio manager who incorporates new factors into her stock selection process, impacting all existing clients. She communicates this change verbally to her clients but does not provide a written update. Has Lorraine violated the CFA Institute Standards of Professional Conduct?
Mary Lorraine, CFA, is a portfolio manager who incorporates new factors into her stock selection process, impacting all existing clients. She communicates this change verbally to her clients but does not provide a written update. Has Lorraine violated the CFA Institute Standards of Professional Conduct?
Explanation:
According to Standard V(B): Communication with Clients and Prospective Clients, members must inform clients about changes to the investment process on an ongoing basis. However, communication is not restricted to written reports; it can include verbal explanations, such as telephone conversations. Lorraine's verbal communication of the changes complies with Standard V(B), as the method of communication is permissible. Therefore, she has not violated the Standards. Options B and C are incorrect because the Standards do not mandate written communication for such changes, and verbal communication suffices.