The Investment Advisor Body of Knowledge + Test Bank. IMCA

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СКАЧАТЬ conflicts of interest shall be fully disclosed on a timely basis.

      3. Provide to clients all material information related to the investment decision-making process as well as other information they may need to make informed decisions based on realistic expectations. All client inquiries shall be answered promptly, completely, and truthfully.

      4. Maintain the confidentiality of all information entrusted by the client, to the fullest extent permitted by regulatory and legal entities in conjunction with the professional's firm/company policy.

      5. Comply fully with all statutory and regulatory requirements affecting the delivery of investment consulting services to clients.

      6. Maintain competency in investment management consulting and financial services through education and training to better serve clients and enhance investment management consulting.

      7. Maintain a high level of professional ethical conduct.

      Part II IMCA Standards of Practice

      Standard 1: The IMCA Code of Professional Responsibility

      See the IMCA Code of Professional Responsibility on previous page.

      Standard 2: Responsibilities to the Client

      STANDARD 2A – A CONSULTANT'S RESPONSIBILITY TO ASSIST IN ACHIEVEMENT OF CLIENT'S FINANCIAL GOALS

      Consultants have a responsibility to make the client's financial goals their highest priority. All recommendations must be made solely in the client's interests and intended to assist clients in reaching their financial goals.

      Explanation

      Each client, whether institutional or individual, must have full confidence that the consultant will make objective, well-researched recommendations based on the client's goals and best interests.

      Procedures for Compliance

      All consultants shall notify clients of their intent to provide unbiased, candid, informed recommendations intended solely to assist clients in reaching their financial goals and to promote the clients' best interests.

      First and foremost, in order to determine the client's goals, the consultant shall profile each client to determine rate-of-return objectives, risk tolerance, time horizons, and tax status. Initial and ongoing recommendations shall be based upon the client's goals, both as originally determined and as they change over time. When conflicts or the potential for conflicts arise, the client must be fully advised of the situation. Without full disclosure of the consultant's role or the firm's role in any potential conflict of interest, the client's best interests may be compromised.

      In addition to the IMCA Standards of Practice (Standards) and IMCA Code of Professional Responsibility (Code), consultants shall adhere to the firm's code of conduct and compliance. If at any time consultants believe that they cannot comply with these standards, they should resign the contract with the client.

      Impact of the Standard

      The professional responsibility implied by this standard is the very basis for clients engaging a consultant on their behalf. Continual understanding, conveyance, and adherence to this standard enhance the stature of the client/consultant relationship and that of the investment consulting profession. Without compliance, trust – the most important aspect of the client/consultant relationship – cannot exist, and the balance of these standards becomes irrelevant.

      STANDARD 2B – A CONSULTANT'S RESPONSIBILITY TO DISCLOSE ALL COMPENSATION

      Consultants have a responsibility to disclose to clients all compensation in all forms and amounts received for consulting services provided.

      Explanation

      Client knowledge of compensation received for services rendered by the consultant establishes a relationship of trust between the parties. The disclosure of compensation as well as disclosure of any financial relationships between the consultant and service providers builds an ethical bridge in the relationship. Disclosure of all compensation, and the sources of such compensation, also eliminates the potential for conflicts of interest between the client and consultant.

      Procedures for Compliance

      Consultants shall annually review all compensation received for consulting services rendered and report to the client any additional compensation beyond that which the client may reasonably be expected to know.

      Impact of the Standard

      By eliminating the potential for conflicts of interest through the disclosure of compensation and its sources, the consultant enhances the reputation of the consulting profession and IMCA.

      STANDARD 2C – A CONSULTANT'S RESPONSIBILITY TO PROVIDE ALL PERTINENT INFORMATION

      It is the responsibility of the consultant to provide each client with all requested information as well as all information available to the consultant that enables the client to make informed decisions.

      Explanation

      In a world where huge amounts of information are easily available via the Internet, clients can access data that may or may not be relevant to their situations or that may be biased or incorrect. Even if relevant, correct, and unbiased, information and data do not translate to experience and knowledge. The consultant is responsible for fully researching all available information, determining the implications of that information for the client's situation, and providing full and objective comments.

      Procedures for Compliance

      Consultants have a professional responsibility to research every relevant and applicable situation presented to them by clients to the fullest extent possible. In all instances, the consultant must inform the client of all aspects known to be relevant to a particular situation, positive or negative. Information shall be presented in an objective and unbiased manner to assist clients in understanding progress toward their goals. This information also shall be made available with a frequency that ensures meaningful communication between the consultant and client. Such information shall relate directly to the client's goals and financial situations.

      Impact of the Standard

      By complying with this standard and presenting all information known to the consultant regarding the client's situation, consultants can help clients weigh the impact of their decisions in the light of full disclosure. This enhances the reputation of the investment consulting profession and IMCA as the professional sources of information, applicability, and objectivity.

      STANDARD 2D – A CONSULTANT'S RESPONSIBILITY TO MAINTAIN CLIENT CONFIDENTIALITY AND PRIVACY

      Consultants have a responsibility to maintain the full privacy and confidentiality of all information provided to them by both institutional and individual clients.

      Explanation

      Institutions, including public funds, and individuals not only have the right to but the need for highly professional, candid, and confidential relationships with their consultants. In order to provide informed professional advice, a consultant must have access to all relevant information involving a client's financial situation, investment status, and goals. By acknowledging the privacy policy relating to the confidentiality of client information and the client/consultant СКАЧАТЬ