Referral Fee Conflict Resolution

Very Hard Cfa Institute Code And Standards Conflicts - Referral Fees

As a financial analyst, you come across a lucrative opportunity to refer clients to another financial advisor who specializes in estate planning. In exchange for these referrals, you are offered a referral fee of 10% of the fees generated from each referred client. While considering this opportunity, you recall the CFA Institute Code of Ethics and Standards of Professional Conduct, specifically regarding conflicts of interest and referral fees.

What is the appropriate course of action for you to take, according to the standards?

Accept the referral fee after disclosing it to your employer and ensuring it is compliant with local regulations.

Decline the referral fee as accepting any fee could compromise your independence and the interests of your clients.

Accept the referral fee without disclosing it, as you are not required to inform your clients of such transactions.

Hint

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% Correct71%