Scenario: A member treats two clients with different risk tolerances identically in all aspects, even when one requires more conservative handling. Which CFA Institute Standard is violated?

• A. Standard IV.C Suitability
• B. Standard VI.A Disclosure of Conflicts
• C. Standard IV.B Fair Dealing
• D. Standard VII.A Conduct as a CFA Institute Member or Candidate

Answer: (C)

Fair dealing requires treating clients fairly and tailoring actions to each client’s individual needs and circumstances, including their stated risk tolerance. When a member handles two clients with different risk tolerances in exactly the same way in all aspects, one client’s distinct constraint is ignored. That means the more conservative client is not receiving service that reflects their actual risk preference, which is unfair and inconsistent with a duty to deal fairly. The situation demonstrates a failure to align recommendations and communications with each client’s acceptable level of risk, violating Standard IV.B Fair Dealing.