CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

In order for the member to comply with this standard, the member is required to disclose additional compensation to his ______.

A. clients
B. employer and clients
C. employer
Correct Answer: C

Members shall disclose to their employer in writing all monetary compensation or other benefits that they receive for their services that are in addition to compensation or benefits conferred by the member's employer.

User Contributed Comments 7

User Comment
stupie just the employer - not the clients?
SueLiu It specifically refers to this standard IV.B
Farina Compliance with standards sets a (high) bare minimum requirement. Standard IV.B. requires employers to be informed and to give written consent to, additional compensation arrangements for a CFA Charterholder to be fully compliant. This does not mean it's a bad idea to let your clients know (providing doing so doesn't violate client confidentiality), but this is just good manners.
cong The client already knows because he or she is offering the additional compensation!
nayagan I think the question implies that the client is making the additional comp. However, if the member has multiple clients and one of those said clients is offering additional comp, I would think that the answer is both?
johntan1979 No need to inform clients! If one client gets to know how much more you are getting paid or rewarded by another client, they might vomit blood or get the perception of preferential treatment.
gill15 Usually you do need to inform clients of additional compensation -- Think III --Loyalty,prudence and care...or think issuer paid research...anything that affects objectivity due to compensation needs to be disclosed BUT for this Standard to the Employer --- Does NOT pertain
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