III(A): Loyalty, Prudence, and Care

Julia Simmons, CFA®, is an independent financial analyst and investment advisor. In a civil suit against Wagner Investment Advisors by a client of Wagner’s, Julia has been hired by Wagner’s attorney to investigate Wagner’s actions and provide independent, expert testimony in court. Julia’s compensation is based solely on time. Julia’s review of Wagner’s actions indicate that Wagner did not act appropriately. CFA® Standard III(A) Duties to Clients—Loyalty, Prudence, and Care requires members to act for the benefit of the client before their own interests. Since Julia was hired by Wagner’s lawyers, she _most likely_ must:

Correct. Julia is bound by the Standard I(B) Professionalism—Independence and Objectivity when preparing her testimony. Although Wagner is her client, she was hired to provide independent testimony. Julia would not violate Standard III(A) Duties to Clients—Loyalty, Prudence, and Care by testifying truthfully. Julia’s recourse would be to discuss the issue with Wagner and its attorneys and, perhaps, withdraw from the assignment.

Incorrect. While Julia may find that withdrawing from the assignment is the best course of action, she is not obligated to do so.

Incorrect. Julia must abide by all of CFA Institute Standards, given the situation.

testify truthfully.

withdraw from the assignment.

act only in Wagner’s best interest.