Explanation:
GARP members shall make a distinction between fact and opinion in the presentation of analysis and recommendations. The manager must inform the clients of the change and tell them it is based upon an opinion and not a fact.
(Book 1, Module 11.1, LO 11.a)
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Question 68
A wealth manager has his own money management firm with two clients. The accounts of the two clients are equal in value. It is the manager's opinion that interest rates will fall in the near future. Based on this, he begins increasing the bond allocation of each portfolio. In order to comply with best practices in the GARP Code of Conduct, the manager needs to:
A
inform the clients of the change and tell them it is based on an opinion and not a fact.
B
make sure that the change is identical for both clients.
C
file a report with the SEC of the new portfolio allocation.
D
perform all of these functions.
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