Standard IV (B.3) - Fair Dealing requires AIMR members to treat all clients and prospects fairly when disseminating investment information or recommendation.
Which of the following is/are implied by this?
I. All clients and prospects must be treated equally i.e. the investment recommendation should be disseminated to all the clients without prejudice.
II. Amongst the eligible clients, no favoritism should be shown i.e. small investors should be treated the same as large investors.
III. All eligible clients must be informed about new opportunities simultaneously.
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A. B. C. D.C
Standard IV (B.3) - Fair Dealing requires AIMR members to treat all clients and prospects fairly when disseminating investment information or recommendation.
However, "fairly" does not mean "equally" for one major reason: each client has different investment needs. A recommendation, if not suitable for a particular client's risk-reward profile, should not be communicated to that client! So care must be taken while disseminating investment recommendations to individual clients to ensure suitability. Therefore, (I) is incorrect. Of the eligible clients, as long as there is no bias shown favoring one client over the other, the standard does not require that they be informed simultaneously; indeed this is almost impossible in most cases because of time lags in communication channels - mail, phone, fax, etc. So (III) is incorrect.