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Question of the Week - Ethical and Professional Standards

AdaptPrepAdaptPrep Des Moines, IA, USAPosts: 211 Sr Associate
edited February 2016 in Level 1 Questions
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?
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Question of the Week - Ethical and Professional Standards 28 votes

Decline to add fund XYZ to the clients’ portfolio
10%
Thefaith_123alfredjcabreravinhsg 3 votes
Refuse to take commission for fund XYZ
7%
TheClawsramans 2 votes
Add fund XYZ to the clients’ portfolio without disclosing the commission
82%
LeChiffreAdaptPreprsparksgoogs1484SkoganMckonkiepaulopitaclangerhitsalwayslupusPahtsanmdlynch3kishBaz_Djtk08001zacknistelrooyjoetomleepabulumsOLUSEGUNchrupekBlueJay3535hakzi 23 votes

Comments

  • AdaptPrepAdaptPrep Des Moines, IA, USAPosts: 211 Sr Associate
    Add fund XYZ to the clients’ portfolio without disclosing the commission

    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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