A client, Ms. Davis, recently inherited a substantial sum of money, significantly increasing her net worth. As her mutual fund representative, what action are you primarily required to take regarding her investment portfolio?

Question: A client, Ms. Davis, recently inherited a substantial sum of money, significantly increasing her net worth. As her mutual fund representative, what action are you primarily required to take regarding her investment portfolio?

Answer options:

• Suggest she immediately opens a new high-growth investment account. ✅ Update her Know Your Client (KYC) information and re-assess the suitability of her current portfolio and future recommendations.
• Advise her to donate a portion of the inheritance to charity for tax benefits.
• Initiate a transfer of all her existing investments to a different fund family.

Correct answer: Update her Know Your Client (KYC) information and re-assess the suitability of her current portfolio and future recommendations.

Explanation: A significant change in a client's financial circumstances, such as a large inheritance, constitutes a 'trigger event' requiring the representative to update KYC information and re-evaluate suitability before making any new recommendations.