A firm destroys emails and other communications related to client matters to avoid records. Violation?

• A. Standard IV.A Loyalty, Prudence, and Care
• B. Standard V.C Record Retention
• C. Standard VII.B Reference to CFA Institute
• D. Standard III.B Additional Compensation Arrangements

Answer: (B)

Maintaining proper records of client communications is essential to ethical practice. CFA Institute’s Standard V.C requires firms to retain and preserve all records related to client matters for the period required by law and firm policy, and to ensure those records are available for regulatory review and audit. Destroying emails and other communications to avoid having records directly violates this obligation, because it undermines accountability, transparency, and the ability to demonstrate compliance with legal and fiduciary duties. It also jeopardizes client protection by erasing a documented history of decisions and disclosures. The action can expose the firm to regulatory penalties and CFA Institute disciplinary actions. While other standards address different duties, the immediate issue here is the duty to retain records, making Standard V.C the relevant standard.