Ethics question

Hey guys,

Please help me to understand why second phrase below is the least appropiate to prevent violation of CFA standards of prof conduct ?

1 Fund Managers must annually review client needs and objectives and rebalance portfolios if required.

I thought that Standard III- Duties to Clients state that Client loyalty and care for those investing in the fund are the responsibility of members and candidates who have an advisory relationship with those individuals not fund’s managers.?

2 All portfolios must be invested according to each client’s investment plan and must be well diversified across all asset classes available

Why 1 is more appropiate ?

This question looks very tricky to me .

Thanx in advance

Well in #2 it says that each client must be diversifies across all asset classes which is much too strong of a statement. what asset classes they should be in will depend on their needs and risk tolerance.