What must clients be informed about if an adviser decides not to aggregate client orders?

What must clients be informed about if an adviser decides not to aggregate client orders?

• A. The adviser will not aggregate and the potential consequences
• B. They will receive a discount on fees for not aggregating
• C. They will be allocated more investment opportunities
• D. There are no consequences for not aggregating

Answer: (A)

Clients must be informed that the adviser will not aggregate orders and the potential consequences of this decision. Order aggregation is typically used to ensure that clients receive the best possible pricing for their trades by combining orders into one larger order. When an adviser opts not to aggregate client orders, it can affect the trading costs, execution prices, and overall access to investment opportunities. Informing clients about the lack of aggregation allows them to understand how this decision may lead to higher costs or less favorable execution prices, as trades could be executed separately rather than as part of a larger order. This transparency is essential for maintaining client trust and ensuring that clients are fully aware of the implications of the adviser's trading practices on their investments. Understanding the potential effects of non-aggregation is crucial for clients, as it directly impacts their investment outcomes and financial results. By communicating these details, the adviser ensures that clients can make informed decisions about their investments based on the adviser's trading strategies.

Clients must be informed that the adviser will not aggregate orders and the potential consequences of this decision. Order aggregation is typically used to ensure that clients receive the best possible pricing for their trades by combining orders into one larger order. When an adviser opts not to aggregate client orders, it can affect the trading costs, execution prices, and overall access to investment opportunities.

Informing clients about the lack of aggregation allows them to understand how this decision may lead to higher costs or less favorable execution prices, as trades could be executed separately rather than as part of a larger order. This transparency is essential for maintaining client trust and ensuring that clients are fully aware of the implications of the adviser's trading practices on their investments.

Understanding the potential effects of non-aggregation is crucial for clients, as it directly impacts their investment outcomes and financial results. By communicating these details, the adviser ensures that clients can make informed decisions about their investments based on the adviser's trading strategies.