Evaluating Compensation Structures and Ethical Responsibilities

Very Hard Cfa Institute Code And Standards Employer Duties - Compensation

As a financial analyst working for a large investment firm, you discover that your compensation structure is heavily tied to sales targets for financial products. You are concerned that this might incentivize behaviors that conflict with the best interests of clients. Additionally, you notice that while the firm emphasizes ethical behavior in its policies, certain senior management decisions seem to prioritize revenue generation over client welfare. Given your position, you review the CFA Institute Code of Ethics and Standards of Professional Conduct regarding employer duties, particularly related to compensation.

In this scenario, which of the following statements about your responsibilities and ethical considerations regarding your compensation is MOST appropriate?

It is acceptable to prioritize achieving sales targets over client needs as long as the firm has established those targets.

You should advocate for the establishment of a compensation structure that aligns more closely with ethical fiduciary responsibilities to clients.

Your primary obligation is to meet your personal income goals, even if this conflicts with the firm's stated ethical policies.

Hint

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