SIE practice questionmediumFiduciary Duty
A registered investment adviser managing client portfolios has which of the following primary obligations?
- ADuty to minimize taxes in all situations
- BDuty to maximize firm profits
- CDuty to follow all client instructions, regardless of suitability
- DFiduciary duty to act in the client’s best interest✓ Correct answer
Explanation
Why D — Fiduciary duty to act in the client’s best interest
Investment advisers must always act in clients’ best interests (fiduciary duty). Maximizing firm profits may conflict with this. Advisers must avoid unsuitable orders and not always prioritize taxes above client goals.
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