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Basic Question 1 of 2
As part of your financial advising services, you refer clients to a friend for their insurance needs. Your friend provides you with a referral fee for these clients.
B. You do not need to disclose the fee if your friend provides the proper service at the least cost.
C. You do not need to disclose the fee unless it is in excess of $100.
D. You cannot accept a referral fee because you have a fiduciary duty to your clients.
A. You must disclose this fee to your clients.
B. You do not need to disclose the fee if your friend provides the proper service at the least cost.
C. You do not need to disclose the fee unless it is in excess of $100.
D. You cannot accept a referral fee because you have a fiduciary duty to your clients.
User Contributed Comments 7
| User | Comment |
|---|---|
| Khadria | I(B) in this guide explains "Modest gifts and entertainment are acceptable. For example, gifts that do not exceed $100 may be accepted as well as entertainment" but it doesn't say that they should not be disclosed. |
| nike | I (B) "Independence and Objectivity" is totally different from VI (C) Referral Fees. |
| MasterD | Correct. $100 rule applies to Independence and Objectivity but does not apply in relation to referral fees and or kick-backs. |
| sanyukta | it is simple: referal fees is not a gift.. |
| elisheva | good explanation. |
| nabilhjeily | a gift does not repeat itself on every transaction ...it must be disclosed |
| MapherRdz | why is not B? if the friend provides the service at the least cost, it must not be disclosed, right? |
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Tamara Schultz
Learning Outcome Statements
demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity
recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct
identify conduct that conforms to the Code and Standards and conduct that violates the Code and Standards
CFA® 2024 Level I Curriculum, Volume 6, Module 3.