Guidance for Standard III: Duties to Clients

Standard III, Duties to Clients: loyalty, prudence and care, fair dealing, suitability, fair performance presentation and keeping client information confidential.

1. 1. Standard III(A)–(B): Loyalty, Prudence, Care and Fair DealingClients come first, ahead of the employer and yourself, and every client gets a fair (not identical) chance at your recommendations and trades.Video · 6 minFree15 min
2. 2. Standard III(A) cases: client identity, loyalty and brokerageName the real client, check what the documents allow, then ask who benefits: if the manager, the firm or a favoured party gains at the client's expense, III(A) is breached.16 min
3. 3. Standard III(B) cases: dissemination, allocation and priorityFair means no client is disadvantaged by timing, priority or price: let everyone hear a recommendation together, and allocate trades by a rule fixed before you see the fills.16 min
4. 4. Standard III(C)–(E): Suitability, Performance Presentation and ConfidentialityKnow the client before you advise, present performance fairly and completely, and keep what clients tell you to yourself.Video · 6 min15 min
5. 5. Standard III(C) cases: IPS, total portfolio and mandatesSuitability is judged against the client's written objectives and constraints, across the whole portfolio, and only by those in an advisory relationship; a mandate manager answers to the mandate.16 min
6. 6. Standard III(D) cases: fair, accurate and complete performancePerformance figures must let a reader judge what was achieved, by whom, over which period and by what method: leave out, relabel or reshape nothing that changes the picture.15 min
7. 7. Standard III(E) cases: exceptions, channels and firm limitsClient information stays private, even after the relationship ends, unless the client permits disclosure, the law requires it or the client's illegal activity is involved; when in doubt, ask compliance or counsel first.14 min
8. 8. Standard III(E) cases: vulnerable investors and cooperationProtect clients who may be losing capacity or being exploited by agreeing a secondary contact in advance, acting only for the client's benefit and documenting every step; and cooperate with CFA Institute inquiries.14 min
9. 9. Standard III(A) and (C) cases: ESG constraints and updated wordingA client's ESG framework is part of the IPS and binds the manager, ESG factors may be added to suitability when they fit the IPS, and the definitions of client and prospective client are explicit.13 min