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CFA Level 3
Intermediate
1/44
Amanda, a portfolio manager, oversees a client's retirement account worth $5 million. The client recently informed Amanda that they need to withdraw a significant portion of the funds in the next quarter to cover unexpected medical expenses. Amanda realizes that liquidating the assets on such short notice could lead to substantial losses for the client due to current market conditions. However, Amanda's firm has been pressuring her to maintain a high asset retention rate. According to the Asset Manager Code of Professional Conduct, what is the most appropriate course of action for Amanda?
a.
Adhere to the firm's asset retention policy by convincing the client to maintain their investments and explore alternative financing options for their medical expenses, such as loans or payment plans, to ensure the firm's AUM remains stable.
b.
Prioritize the client's best interests by carefully explaining the potential consequences of a hasty withdrawal and working with the client to develop a plan that minimizes losses, even if it means a short-term reduction in assets under management for Amanda's firm.
c.
Seek guidance from her supervisor and the firm's compliance department to determine the best approach that balances the client's needs with the firm's interests, and document the decision-making process to demonstrate compliance with fiduciary duties.
Intermediate