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Up1
Mutual fund XYZ offers Lisa Smith, CFA a 1% commission for adding the fund to her clients’ portfolios. Which of the following actions do the Standards of Professional Conduct not allow Lisa to take?
- Decline to add fund XYZ to the clients’ portfolio
- Refuse to take commission for fund XYZ
- Add fund XYZ to the clients’ portfolio without disclosing the commission
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Up4
Section VI(C) of the Standards: Referral Fees. Members and Candidates must disclose to
their employer, clients, and prospective clients, as appropriate, any
compensation, consideration, or benefit received from or paid to others for the
recommendation of products or services.Lisa is allowed to decline the fund addition or refuse
commission for the fund according to the Standards. She has to make the
necessary disclosures if she wishes to add fund XYZ to the client’s portfolio.
Lisa is NOT allowed to add the fund without disclosing the commission.
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