Handling Conflicts of Interest in Recommendations

Easy Professional Standards Application Conflicts Of Interest

As a portfolio manager, Maria has received a lucrative offer from a technology firm to recommend their stock to her clients, promising her a substantial fee for this referral. Maria must consider her responsibilities regarding conflicts of interest before making a decision.

Which of the following actions should Maria take to adhere to the CFA Institute's ethical requirements regarding conflicts of interest?

Accept the fee from the technology firm and recommend their stock to clients without disclosing the arrangement.

Deny the offer and continue making recommendations based purely on her independent research.

Accept the offer but fully disclose the fee arrangement to her clients before making the recommendation.

Hint

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