Which of the following best describes the primary duty of a portfolio manager operating under a discretionary management agreement with a client in Canada?

Question: Which of the following best describes the primary duty of a portfolio manager operating under a discretionary management agreement with a client in Canada?

Answer options:

• To ensure the client's portfolio achieves the highest possible return, regardless of risk, to maximize asset growth.
• To execute trades efficiently at the best available prices, minimizing transaction costs. ✅ To act in the client's best interest, exercising due care, skill, and loyalty in managing the portfolio according to the IPS.
• To meet or exceed industry-average returns for comparable portfolios.

Correct answer: To act in the client's best interest, exercising due care, skill, and loyalty in managing the portfolio according to the IPS.

Explanation: The primary duty of a portfolio manager under a discretionary agreement is a fiduciary duty, which means acting in the client's best interest with utmost care, skill, and loyalty, always aligning decisions with the agreed-upon Investment Policy Statement (IPS).