Investing Public Relationships and Responsibilities

A

Relationships with and Responsibilities to the Investing Public are dealt with under Standard V.

The correct answer is E. Standard IV.

Standard IV, titled "Duties to Clients," is a part of the CFA Institute's Code of Ethics and Standards of Professional Conduct. It covers the relationships and responsibilities that investment professionals have towards the investing public. The goal of Standard IV is to ensure that CFA charterholders and candidates act in the best interests of their clients and maintain the highest level of professionalism and integrity.

Standard IV consists of several sub-standards that outline specific responsibilities. These include:

1. Loyalty, Prudence, and Care: Investment professionals must act with loyalty and care, placing clients' interests above their own. They should exercise reasonable judgment and diligence to make informed investment decisions on behalf of their clients.

2. Fair Dealing: Investment professionals should deal fairly and impartially with all clients, providing them with accurate and complete information. They must not engage in any practices that could mislead or deceive clients.

3. Suitability: Investment professionals should consider clients' individual circumstances, including their financial situation, investment objectives, and risk tolerance, to ensure that investment recommendations are suitable for their specific needs.

4. Performance Presentation: When presenting investment performance to clients, investment professionals must provide fair and accurate information, disclosing the relevant factors that may affect the interpretation of performance results.

5. Preservation of Confidentiality: Investment professionals must keep client information confidential unless authorized by the client or required by law to disclose it. They should not use confidential information for personal gain or disclose it to unauthorized individuals.

6. Preservation of Client Trust: Investment professionals should take steps to build and maintain their clients' trust. They should not engage in any activities that could compromise the integrity or independence of their professional judgment.

By adhering to Standard IV, investment professionals demonstrate their commitment to ethical behavior and the protection of their clients' interests. This standard helps promote trust, transparency, and professionalism in the financial industry, enhancing the overall integrity of the investment profession.