Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 1 of 2
As part of your financial advising services, you refer clients to a friend for their insurance needs. Your friend provides you with a referral fee for these clients.
B. You do not need to disclose the fee if your friend provides the proper service at the least cost.
C. You do not need to disclose the fee unless it is in excess of $100.
D. You cannot accept a referral fee because you have a fiduciary duty to your clients.
A. You must disclose this fee to your clients.
B. You do not need to disclose the fee if your friend provides the proper service at the least cost.
C. You do not need to disclose the fee unless it is in excess of $100.
D. You cannot accept a referral fee because you have a fiduciary duty to your clients.
User Contributed Comments 7
| User | Comment |
|---|---|
| Khadria | I(B) in this guide explains "Modest gifts and entertainment are acceptable. For example, gifts that do not exceed $100 may be accepted as well as entertainment" but it doesn't say that they should not be disclosed. |
| nike | I (B) "Independence and Objectivity" is totally different from VI (C) Referral Fees. |
| MasterD | Correct. $100 rule applies to Independence and Objectivity but does not apply in relation to referral fees and or kick-backs. |
| sanyukta | it is simple: referal fees is not a gift.. |
| elisheva | good explanation. |
| nabilhjeily | a gift does not repeat itself on every transaction ...it must be disclosed |
| MapherRdz | why is not B? if the friend provides the service at the least cost, it must not be disclosed, right? |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
demonstrate a thorough knowledge of the Code of Ethics and Standards of Professional Conduct by applying the Code and Standards to specific situations;
recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct.
CFA® 2025 Level II Curriculum, Volume 6, Module 44.