Which statement is true regarding UITFs and risk profiles?

The statement that the choice of fund should depend on client risk profiles is accurate because it reflects a fundamental principle of investment management. Each investor has a unique risk tolerance, which is influenced by factors such as their financial goals, time horizon, and personal circumstances. By aligning fund recommendations with these risk profiles, financial advisors can create a more tailored investment strategy that is suited to the individual's needs and preferences.

Investing in a fund that matches the client's risk profile helps ensure that they are comfortable with their investment choices and can endure potential market fluctuations. For example, a conservative investor may prefer UITFs that focus on fixed-income assets, while a risk-tolerant investor might lean toward equity-focused UITFs. This approach not only helps in achieving specific investment objectives but also promotes a long-term partnership between the advisor and the investor, as clients are more likely to stay committed to an investment strategy that aligns with their risk appetite.