Ned Brenan tells clients to expect a 25% return based on past performance. What is true about his statements?

Ned Brenan's statement regarding a 25% return based on past performance raises significant ethical concerns related to the standards of professional conduct. When a professional communicates expected returns based solely on historical performance, they risk misleading clients about future possibilities.

Standard III(D), which pertains to performance presentation, emphasizes that members must not misrepresent potential returns based on historical data. By explicitly stating a specific return target derived from past performance, Brenan suggests a certainty that is not guaranteed, violating this standard.

Furthermore, Standard I(C) relates to the duty of loyalty and care, requiring professionals to act in the best interests of their clients. By promising a particular rate of return that is not justifiable, he undermines his obligation to provide suitable investment advice tailored to the client's circumstances and the risks involved.

Therefore, Brenan's statement is a breach of both the performance presentation standard and the duty of loyalty and care, which is why the conclusion that he has violated both these standards is accurate and justifiable.