Laws & RegulationsQuestion 15 of 100
Which of the following best describes a fiduciary obligation that an investment adviser owes but a broker-dealer historically did not owe under a pure suitability standard?
a.An ongoing duty of loyalty and care requiring the adviser to place the client's interest first and disclose all material conflicts
b.A duty only to ensure a single transaction is not unsuitable at the point of sale
c.A duty to guarantee investment performance
d.A duty owed only to institutional clients
Explanation
An investment adviser is a fiduciary with continuing duties of loyalty and care, including full disclosure of material conflicts and placing the client's interest first. A historical suitability standard focused on whether a specific recommendation was suitable at the moment of sale. No adviser can guarantee performance.
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