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

Rove, a performance analyst, proposes reports comparing monthly performance of similar-strategy portfolios and listing securities held across client accounts, with outliers sent to the CIO. These reports are most likely:

The reports are an appropriate oversight tool. They comply with Standard III(B) and let the firm review after the fact whether advisers treat clients with similar objectives fairly, with outliers escalated to the CIO.

  1. Aa breach because they share client data internally
  2. Bunnecessary because analysts have no fair dealing duty
  3. Can appropriate oversight tool for monitoring fair treatment of clientsCorrect

Explanation

The guidance states such reports comply with Standard III(B) and help the firm conduct after-the-fact reviews of how advisers deal with client portfolios. Monitoring reports are an important oversight tool.

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