Ms. Chen, a CFP professional, has been asked by a long-standing client, Dr. Lee, to invest in a private real estate venture that Ms. Chen is also a passive investor in. Ms. Chen believes the venture is sound and beneficial for Dr. Lee. What is Ms. Chen's most appropriate action to uphold her professional obligations?

Question: Ms. Chen, a CFP professional, has been asked by a long-standing client, Dr. Lee, to invest in a private real estate venture that Ms. Chen is also a passive investor in. Ms. Chen believes the venture is sound and beneficial for Dr. Lee. What is Ms. Chen's most appropriate action to uphold her professional obligations?

Answer options: ✅ Advise Dr. Lee to invest, ensuring she discloses her personal involvement in the venture and obtains Dr. Lee's informed consent.

• Decline to advise Dr. Lee on this specific investment to avoid any perceived conflict of interest.
• Recommend Dr. Lee consult with another independent financial advisor for an opinion on the venture.
• Invest alongside Dr. Lee without disclosing her involvement, as long as the investment truly benefits Dr. Lee.

Correct answer: Advise Dr. Lee to invest, ensuring she discloses her personal involvement in the venture and obtains Dr. Lee's informed consent.

Explanation: FP Canada's Standards require disclosure of conflicts of interest. Investing in the same venture as a client is a conflict, and it must be fully disclosed, along with obtaining the client's informed consent, to maintain confidence and trust.