Chartered Investment Manager (CIM) Practice Exam · Question
When an investment manager holds a fiduciary duty to a client, what is their primary obligation?
A fiduciary duty is a legal obligation to act in the best interest of another party. For an investment manager, this means always prioritizing the client's fina
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Question: When an investment manager holds a fiduciary duty to a client, what is their primary obligation?
Answer options:
- To ensure the client's portfolio always outperforms a benchmark. ✅ To act in the client's best interest, putting the client's needs before their own.
- To provide investment advice that results in positive returns.
- To disclose all investment strategies to the client, regardless of their complexity.
Correct answer: To act in the client's best interest, putting the client's needs before their own.
Explanation: A fiduciary duty is a legal obligation to act in the best interest of another party. For an investment manager, this means always prioritizing the client's financial well-being and objectives above their own, avoiding conflicts of interest.
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