) DID LITMAN VIOLATE ANY CFA INSTITUTE STANDARDS OF PROFESSIONAL CON...
4.) Did Litman violate any CFA Institute Standards of Professional Conduct in regard to his
performance reviews for Twain clients?
A.
Yes, with respect to his recent review for the client with the inheritance
B.
No.
C.
Yes, with respect to the frequency of reviews for his 10 largest clients
Answer = B
Standard III(C)–Suitability requires that members make a reasonable inquiry into a client
or prospective client’s investment experience, risk and return objectives, and financial
constraints prior to making any investment recommendations or taking investment
action and must update this information regularly. Such an inquiry should be repeated
at least annually and prior to material changes to specific investment recommendations
or decisions on behalf of the client. The Code and Standards do not require clients to be
treated the same.
“Guidance for Standards I–VII,” CFA Institute
Standard III(C)