A client, Mr. Henderson, contacts his mutual fund representative, Sarah, expressing concern about unusual activity in his account. He suspects unauthorized transactions occurred last month. Which of the following is the most appropriate initial step for Sarah in addressing Mr. Henderson's concern?

Question: A client, Mr. Henderson, contacts his mutual fund representative, Sarah, expressing concern about unusual activity in his account. He suspects unauthorized transactions occurred last month. Which of the following is the most appropriate initial step for Sarah in addressing Mr. Henderson's concern?

Answer options: ✅ Immediately contact her branch manager and the compliance department to report the potential fraud and begin an internal investigation.

• Advise Mr. Henderson to contact the police directly to report the suspicious activity.
• Tell Mr. Henderson that she will review his account statements from the last three months to see if she can find anything unusual.
• Suggest to Mr. Henderson that he change his online account password and monitor his account for further suspicious activity.

Correct answer: Immediately contact her branch manager and the compliance department to report the potential fraud and begin an internal investigation.

Explanation: Any suspicion of fraud or unauthorized transactions must be immediately escalated internally to the branch manager and compliance department. This ensures the firm can take appropriate action, secure accounts, and begin an investigation in accordance with regulatory requirements.