A broker places a high-fee investment that benefits the broker, ignoring the client's objectives. Which Standard is violated?

• A. Standard IV.A Loyalty, Prudence, and Care
• B. Standard V.B Communication with Clients and Prospective Clients
• C. Standard I.C Misrepresentation
• D. Standard VI.B Priority of Transactions

Answer: (A)

The main idea here is the duty to place the client’s interests ahead of the adviser’s and to exercise prudent judgment in every recommendation. When a broker pushes a high‑fee investment that benefits the broker and ignores what the client actually wants or needs, a conflict of interest is created and the broker fails to act with loyalty and care. This violates the standard that requires advisers to subordinate their own interests and to make decisions that are in the best interests of the client, using reasonable care and diligence.

This isn’t primarily about telling the truth or misrepresenting facts, which would fall under misrepresentation, nor about how orders are prioritized in trading, which relates to priority of transactions. It’s about the fundamental obligation to act with loyalty and prudence toward the client and to avoid or fully disclose and manage conflicts that could influence the recommendation.