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Is this a violation of CFA code of ethics?

Would it be a violation of the code of ethics if a CFA charterholder who is a portfolio manager, decided to show clients a different time period of returns based on the current performance. So if for example the past 6 months was good for a clients account they would show performance for 6 months, but if the past 6 months was poor, but then the past month was good, they would show just one month performance instead? To me this is very unethical but I am wondering what others think.

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Yes that’s a violation. It also a breach of fiduciary duty. It’s terribly unprofessional, and it puts you and your firm at risk.  

Financial Planner
BBA (Finance & International Business) 1998,
MBA (With a Global Perspective) 2011,
ChFC® 2018, CLU® 2019
Owns an Independent RIA/Insurance Agency
Series 65, Life, Annuities, Health (Expired 6,63)

How would you feel if you were the client……….

#raging

We have a competitor that does this.  I have never seen a CFA Charterholder at that firm.  

We have pointed out their moving timeframes to clients.  They are always annoyed,  

Is this criminal since it’s a breach of fiduciary duty?

ExAnalyst wrote:
Is this criminal since it’s a breach of fiduciary duty?

It’s a breach of fiduciary duty … where, exactly?

Simplify the complicated side; don't complify the simplicated side.

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Financial Planner
BBA (Finance & International Business) 1998,
MBA (With a Global Perspective) 2011,
ChFC® 2018, CLU® 2019
Owns an Independent RIA/Insurance Agency
Series 65, Life, Annuities, Health (Expired 6,63)

Gwoods posted that above.

So long as you provide standard performance period returns (YTD, 1, 3, 5, 10 year) along with a “carved out” period, you’re fine. But you still have to show the complete picture. Not exactly sure how this fits into the CFA CoE, but it’s an SEC/FINRA thing for sure.

Edit: Because you’d be in violation with SEC/FINRA rules, you’d be in violation of the CoE as well.

Violation. because that is cherry-picking and attempt to mislead

ExAnalyst wrote:

 So if for example the past 6 months was good for a clients account they would show performance for 6 months, but if the past 6 months was poor, but then the past month was good, they would show just one month performance instead? To me this is very unethical but I am wondering what others think.

violation- Standard III-D: Performance Presentation, selective accounts/selective time frames

gwoods wrote:

Look here to review the code of ethics.

baller alert, are you managing Ohai’s money by any chance?

Financial Planner
BBA (Finance & International Business) 1998,
MBA (With a Global Perspective) 2011,
ChFC® 2018, CLU® 2019
Owns an Independent RIA/Insurance Agency
Series 65, Life, Annuities, Health (Expired 6,63)

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