Which statement is true regarding the handling of capital investments?

Investment strategies must be tailored to meet individual client needs because clients have different financial goals, risk tolerances, investment horizons, and personal preferences. A one-size-fits-all approach fails to acknowledge the unique circumstances of each investor, which could lead to suboptimal investment outcomes. For instance, a conservative investor nearing retirement may need a different strategy compared to a young professional with a longer time horizon who can afford to take more risks.

Customizing investment strategies not only aligns with clients' expectations but also helps build trust and long-term relationships between clients and financial advisors. By understanding and addressing the specific financial goals and risk appetites of each client, advisors can create a more effective and suitable investment plan that is likely to result in higher satisfaction and better performance over time.