Referral Fees and Ethical Standards

Hard Cfa Institute Code And Standards Conflicts - Referral Fees

As a CFA charterholder working in a financial advisory role, you are approached by a friend who owns a local bakery. Your friend is seeking investment advice and offers you a referral fee if you can help him attract investors for his business. You recall the CFA Institute's Code of Ethics and Standards of Professional Conduct, particularly the sections pertaining to conflicts of interest and referral fees. What should be your course of action regarding the request for a referral fee?

Accept the referral fee as long as you disclose it to your clients.

Decline the referral fee, as accepting it could pose a conflict of interest.

Consult with your compliance department to seek approval before deciding.

Hint

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