A registered investment advisor receives a request from a client to move 25% of his diversified $1million account balance to the common stock of a particular company. The client believes that the company is about to receive a merger offer. This transaction is outside the client's current risk profile, but it would help him reach his investment goals if the deal were to occur. What course of action should the advisor undertake to comply with the CFA Institute Code and Standards?

Educate the client on the suitability concerns involved with the requested actions before following the approved procedures for executing a client's unsolicited transaction.

Execute the trade immediately as requested by the client because any delays would become a liability for the advisor.

Inform the client that the trade cannot be executed until after the two meet to update his investment policy statement because the request in unsuitable.