CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

The stated purposes of Standard VI (C) Referral Fees, are to ______.

I. help the customer/client evaluate the full cost of the services
II. help the customer/client evaluate any possible partiality shown in the recommendations of services
III. help the customer/client evaluate potential conflicts of interest as result of the participation of immediate family in transactions
Correct Answer: I and II only

Statements I and II give the two primary reasons listed in the Standards of Practice Handbook for disclosing referral fees to clients. The purpose given in statement III is not a primary consideration.

User Contributed Comments 7

User Comment
danlan Not III?
mtcfa III is awkward... but incorrect since it really has nothing to do with referral fees.
0is4eva Disclosure of conflict - Standard VI A.
danlan2 In the first line of notes, it is saying: such disclosure should help the client evaluate possible partiality shown in any recommendations of services as well as evaluate the full cost of services.
wulin III belongs to Priority of Transactions, not Referral Fees.
ericczhang I would guess III is a specific situation covered in VI.C but is not a general "Stated Purpose" of the standard.
gerdvar Isn't the full cost of the service for the employer only?
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