A member uses a personal relationship to influence a client's investment decision without disclosure. Violation?

• A. Standard IV.B Fair Dealing
• B. Standard IV.A Loyalty, Prudence, and Care
• C. Standard VI.A Disclosure of Conflicts
• D. Standard I.D Misconduct

Answer: (B)

Placing client interests first and acting with loyalty, prudence, and care is the key idea. Using a personal relationship to influence a client’s investment choice without disclosure undermines objectivity and creates a conflict of interest, which compromises the duty to act in the client’s best interests. Because a disclosure would be necessary to reveal that influence and allow the client to judge the bias, this behavior violates the obligation to be loyal and prudent in dealings with clients. While disclosure and fairness are important, the core issue here is the failure to uphold loyalty and care by letting a personal relationship improperly steer the advice.