CFA Latest CFA Level 1 Discussions Question of the Week – Ethical and Professional Standards

Question of the Week – Ethical and Professional Standards

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    • AdaptPrep
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      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
    • AdaptPrep
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      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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