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Investment Analysis, Recommendations & Actions

  • Diligence & Reasonable Basis: Exercise diligence, independence and thoroughness in analyzing investments. Have a reasonable and adequate basis, supported by appropriate research and investigation.
  • Communication with clients & prospective clients: Disclose to clients the basic format and general principles of the investment processes. Use reasonable judgment in identifying which factors are important to their investment analyses, Distinguish between fact and opinion.
  • Record Retention: Must develop and maintain appropriate records to support their investment analysis, recommendations, actions, and other investment-related communications with clients.


A portfolio manager allocates IPO shares to her sister's fee based account, after allocating shares to all other client's portfolio. Is she in violation of any of the code and standards of ethics?


The correct answer is Violated standard III(B) Fair dealing. Manager should have treated her sister's account at par with her any other client.

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