Lesson 4 of 8 · 15 min

Standard III(C)–(E): Suitability, Performance Presentation and Confidentiality

Know the client before you advise, present performance fairly and completely, and keep what clients tell you to yourself.

In short

III(C) Suitability: in an advisory relationship, ask about the client's experience, risk and return objectives and constraints before acting, update regularly, and judge each investment within the total portfolio.
When managing to a mandate, invest only in line with the stated strategy; the fund manager is not responsible for suitability for each fund investor.
Unsolicited trades that are unsuitable: discuss first; minor ones can proceed with the client's acknowledgment, material ones call for an IPS update.
III(D) Performance Presentation: performance information must be fair, accurate and complete. GIPS compliance is the best way to meet it.
III(E) Preservation of Confidentiality: keep current, former and prospective client information confidential unless it concerns the client's illegal activity, law requires disclosure, or the client permits it.

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