Chartered Investment Manager (CIM) Practice Exam · Question
What is the core principle behind an investment advisor's fiduciary duty to their clients?
Fiduciary duty legally obligates an advisor to act solely in the best interests of their client, placing the client's financial well-being and objectives ahead
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Question: What is the core principle behind an investment advisor's fiduciary duty to their clients?
Answer options: ✅ To always act in the client's best interest and place the client's interests above their own.
- To maximize the advisor's compensation through portfolio fees.
- To diversify the client's portfolio across as many asset classes as possible.
- To guarantee a positive investment return for the client.
Correct answer: To always act in the client's best interest and place the client's interests above their own.
Explanation: Fiduciary duty legally obligates an advisor to act solely in the best interests of their client, placing the client's financial well-being and objectives ahead of their own.
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