A Canadian CIM professional is recommending a significant change in asset allocation to a client. What is a crucial step they must take according to regulatory guidelines?

Question: A Canadian CIM professional is recommending a significant change in asset allocation to a client. What is a crucial step they must take according to regulatory guidelines?

Answer options:

• Only proceed if the client explicitly requests the change in writing. ✅ Ensure the new asset allocation aligns with the client's updated Investment Policy Statement (IPS) and risk profile.
• Guarantee a specific level of return will be achieved with the new allocation.
• Inform the client that performance reporting will be suspended during the transition.

Correct answer: Ensure the new asset allocation aligns with the client's updated Investment Policy Statement (IPS) and risk profile.

Explanation: CIM professionals have a duty to ensure that all investment recommendations and portfolio changes are suitable for the client. This suitability is assessed against the client's current investment objectives, risk tolerance, and other details documented in their IPS.