Hello,
Which of the following investment parameter categories of the IPS is least likely to include one’s preference for investments that reflect one’s environmental and social concerns?
Did you look through the curriculum to find the answer?
You’ll remember it much better if you do.
It’ll take about 2 minutes.
pretty sure he only asked because this was a question in the LES and the solution is misleading / not reflective of what the curriculum says.
Curriculum states for the IPS key investment parameters:
“Asset class preference: This section lists the main asset classes included in the client’s portfolio. These asset class preferences are often described in the context of risk, return, and income characteristics.”
“Other investment preferences: […] Environmental, social, and governance (ESG)-related constraints should normally appear in this section.”
“Constraints: […] For clients expressing preferences for SRI, ESG, religious, or ethical investment standards, the constraints imposed by these should be noted here.”
Despite this description (and I’d also say common sense), the answer to the question is (according to the solutions):
“The correct answer is B. The “Other investment preferences” category typically includes legacy holdings such as shares of stock of a former employer or an investment the client wishes to make countering the wealth manager’s advice. A is incorrect because it represents a category that may include a client’s preference for environmentally and socially oriented investments. C is incorrect because it represents a category that may include client’s preferences for environmentally and socially oriented investments.”
… think this is highly confusing and something has to be fixed here!