CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

Andrew Walker, CFA, manages accounts for high-net-worth clients, including his own family's account. He has no beneficial ownership in his family's account. Because Walker is concerned about the appearance of improper behavior in managing his family's account, when his firm purchases a block of securities, Walker allocates to his family's account only those shares that remain after his other client accounts have their orders filled. The fee for managing his family's account is based on his firm's normal fee structure. According to the Standards of Practice Handbook, Walker's best course of action with regard to the management of his family's account would be to ______.
A. treat the account like other client accounts
B. arrange for the account to be transferred to another firm
C. transfer the account to another investment manager in his firm
Explanation: Walker has breached his duty to his family by treating them differently from other clients. They are entitled to the same treatment as any other client of the firm. Walker should treat his family's account like any other client account.

User Contributed Comments 2

User Comment
Yrazzaq88 This one is a little bit tricky, but I managed to get it correct.

I think that it's difficult to treat the account like any other client's account when you are dealing with your family's account. There will always be some sort of bias or preference to make that account superior to other clients. But I chose A) assuming that if I treated the account like any other client, I would most likely have my work supervised by someone who is more senior than me.

C) would have been my option, but then again, what difference would that make?

B) would not make sense, since that would mean losing business and issuing it to your competitor.
jacojacobs I chose C on the basis of avoiding a conflict of interest situation.
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