Skip to content

NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Ethical Issues

Under the ethical principles expected of an investment adviser, which action best shows that the adviser is treating client information with appropriate confidentiality?

The adviser should use client information only for the advisory purpose and disclose it only with the client's consent or when the law requires it. Sharing details with friends, manufacturers or on social media breaches the duty of confidentiality owed to the client.

  1. ASharing a client's portfolio details with a friend who is also an investor
  2. BDisclosing client holdings to a product manufacturer to earn a higher incentive
  3. CUsing client information only for the advisory purpose and disclosing it to others only where the client consents or the law requiresCorrect
  4. DPosting anonymised client success stories with the client's name and photograph on social media

Explanation

Client information must be kept confidential and used only for the advisory relationship. Disclosure is permitted only with the client's consent or where law or a regulator requires it. Sharing with friends, product manufacturers for incentives, or publicly with names breaches confidentiality.

Did you get it right without looking?

One question tells you little. A timed set on Ethical Issues shows your real accuracy, how long you take and where you lose marks.

Practise Ethical IssuesFree diagnostic mock

More Ethical Issues questions