Referral Fees and Ethical Standards

Very Hard Cfa Institute Code And Standards Conflicts - Referral Fees

As a CFA charterholder, you are approached by a financial advisory firm that offers a referral fee for any clients you send their way. The amount of the referral fee is significant, making it appealing for your practice. However, you are aware of the CFA Institute's Standards of Professional Conduct, particularly regarding conflicts of interest and referral fees.

Given your responsibilities to your clients, what should you consider before accepting this referral fee?

You can accept the referral fee as long as you disclose it to your clients.

You must decline the referral fee no matter the circumstances, as it creates an inherent conflict of interest.

You may accept the referral fee if you believe it enhances the value you provide to your clients.

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