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CFA Level I · CFA Level I Exam · Guidance for Standard III: Duties to Clients

A candidate manages a trust account and has direct access to client funds. Which statement about the candidate's responsibilities is most accurate under Standard III(A)?

Having access to client funds amounts to custody, which raises the level of responsibility, and the governing trust documents are the primary determinant of the candidate's powers and duties. The candidate's own judgment cannot override them without risking a violation of Standard III(A).

  1. ACustody of client assets raises the level of responsibility, and the trust documents are the primary determinant of the candidate's powers and dutiesCorrect
  2. BCustody has no effect on responsibilities if the candidate acts prudently
  3. CThe candidate's own judgment of the client's best interest overrides the trust documents

Explanation

Direct or indirect access to client funds means custody, which creates a heightened level of responsibility. Pools of assets must be managed in accordance with governing documents such as trust documents, which are the primary determinant of powers and duties. Acting contrary to them risks violating Standard III(A).

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