CCRM Ethical Practice 4 — Questions and Answers
Question 1: A long-term client insists on a strategy the CCRM believes is unsuitable. The ethical course of action is to:
- Implement it immediately to preserve the relationship
- Document the concern, advise against it in writing, and implement only after documented client acknowledgment (Correct answer)
- Refuse and terminate the relationship
- Delay implementation without explaining the reason
Correct answer: Document the concern, advise against it in writing, and implement only after documented client acknowledgment
Professionals must advise clients of suitability concerns in writing and obtain acknowledgment before proceeding with client-directed actions.
Question 2: Which action best demonstrates the ethical principle of fairness in client treatment?
- Offering premium service exclusively to the firm's top-revenue clients
- Applying consistent standards and processes regardless of client profitability (Correct answer)
- Providing discounts only to clients who refer new business
- Prioritizing compliance for institutional clients over retail clients
Correct answer: Applying consistent standards and processes regardless of client profitability
Fairness requires applying equal standards and processes to all clients irrespective of their commercial value to the firm.
Question 3: An ethical obligation to keep client information confidential continues:
- Only while the client relationship is active
- Even after the relationship ends, unless disclosure is legally required (Correct answer)
- Until the end of the calendar year
- Until the next regulatory review
Correct answer: Even after the relationship ends, unless disclosure is legally required
Confidentiality obligations persist beyond the end of the engagement and can only be broken when legally mandated.
Question 4: When receiving a gift from a client that may influence professional judgment, the ethical action is to:
- Accept it as a customary business courtesy
- Decline or disclose the gift per firm policy and ethical guidelines (Correct answer)
- Accept if the value is below a personal threshold
- Accept and report it only at year-end
Correct answer: Decline or disclose the gift per firm policy and ethical guidelines
Gifts that could compromise objectivity must be declined or disclosed in accordance with firm and professional ethical policies.
Question 5: The ethical standard of 'do no harm' in client relationship management means:
- Avoiding legal disputes with clients
- Ensuring professional actions do not cause foreseeable injury to clients or third parties (Correct answer)
- Limiting service scope to reduce liability exposure
- Avoiding all high-risk client segments
Correct answer: Ensuring professional actions do not cause foreseeable injury to clients or third parties
Professionals have a duty to avoid foreseeable harm to all parties, including clients, counterparties, and the broader public.
Question 6: A CCRM is asked to recommend a product that is profitable for the firm but not optimal for the client. The ethical response is to:
- Recommend the firm product to meet internal sales targets
- Recommend the most suitable option for the client even if less profitable for the firm (Correct answer)
- Present both options and allow the client to decide without guidance
- Seek approval from management before making any recommendation
Correct answer: Recommend the most suitable option for the client even if less profitable for the firm
Ethical suitability obligations require recommending what is best for the client rather than what benefits the firm.
Question 7: If a CCRM professional becomes aware of a potential regulatory violation within their firm, ethical practice requires:
- Waiting to see if it self-corrects
- Reporting the violation through proper internal or external channels (Correct answer)
- Documenting it privately without escalation
- Informing only the clients directly affected
Correct answer: Reporting the violation through proper internal or external channels
Ethical and legal obligations require reporting known regulatory violations through appropriate compliance or whistleblower channels.
CCRM Ethical Practice 4
A long-term client insists on a strategy the CCRM believes is unsuitable.
The ethical course of action is to: