CFA Level I Exam · Guidance for Standard V: Investment Analysis, Recommendations, and Actions

Group Research and Decision Making under Standard V(A)

Updated 7 October 2026 · Fact-checked

Under Standard V(A), a member may rely on group research and group decisions, because the standard does not require every member to agree. If a member disagrees but the work still has a reasonable basis, the member need not dissent or withdraw. If it lacks one, the member should dissent and may need to remove their name.

Understand Group Research and Decision Making

Investment work is often done by teams. A research department publishes one recommendation. An investment committee votes on one portfolio decision. Standard V(A) Diligence and Reasonable Basis asks each member to exercise diligence, independence and thoroughness, and to have a reasonable and adequate basis for recommendations and actions. The question is what this means when a group decides.

The Handbook guidance is practical. A member is not required to agree with every conclusion of a group in order to be associated with it. Group research may reflect a consensus, and the consensus can differ from what a single member would conclude. If the member believes the work has a reasonable and adequate basis and was produced with diligence and thoroughness, the member does not have to dissent or remove their name.

The duty changes when the member believes the group's work does not have a reasonable and adequate basis, or that the process was not diligent. Then the member should not simply stay quiet and keep their name on it. The guidance says a member who dissents and whose dissent is not reflected in the group's output should consider removing their name from the report or decision, because staying associated could be read as endorsing it. That is the point where Standard V(A), and often Standard I(C) Misrepresentation, come into play.

Think of two separate tests. First: do I merely disagree with the conclusion, or do I believe the basis is inadequate? Mere disagreement with a sound process is allowed. Second: if the basis is inadequate, have I made my dissent known, and is my name still attached? Exams reward you for telling these two situations apart.

The same standard also covers reliance on others. A member may rely on the group's work, but the group process itself should be diligent. A member who joins a committee and rubber-stamps conclusions without any review, in a situation where they should have known better, is the weaker case.

Key formulas to remember

Standard V(A) core duty: Diligence, independence and thoroughness + reasonable and adequate basis (supported by research and investigation); Applies to analysis, recommendations and investment actions, including those made by groups.
Disagreement with a sound basis: Reasonable basis exists → member need not dissent or remove their name; The standard does not require agreement with every group conclusion.
Disagreement because basis is inadequate: No reasonable basis → dissent, and consider removing name if dissent is not reflected; Staying associated can imply endorsement and may also raise Standard I(C).

How to solve Group Research and Decision Making questions

Use this sequence for any question about a member who disagrees with or relies on group work.

1Identify the Standard: group research or committee decisions point to V(A), with I(C) as a possible second.
2Ask what the member actually objects to: the conclusion, or the basis and process.
3If the member only disagrees with the conclusion but the work is diligent and has a reasonable basis, the member may stay associated. No violation.
4If the member believes the basis or process is inadequate, the member should dissent.
5Check whether the dissent was reflected in the final output. If not, the member should consider removing their name.
6Check whether the member has done their own part with diligence, rather than blindly relying on others.
7Pick the option that matches the exact conditions, not the one that is most extreme.

Quickest way: Disagree or inadequate? Two-question filter

When to use it: Use when you have about 90 seconds and the stem describes a team recommendation with a dissenting member.

Underline whether the member doubts the conclusion or the basis.
Conclusion only, sound basis: choose the option that allows staying associated without violation.
Basis inadequate: choose the option that dissents and, if ignored, removes the name.
Eliminate options that require the member to resign, always dissent, or report to a regulator unprompted unless the stem adds facts.
If still unsure, guess the option that is conditional rather than absolute.

Common mistakes in Group Research and Decision Making

Thinking every member must agree with the group conclusion.
The word diligence suggests personal full agreement.
Fix: Remember the guidance: consensus work can differ from one member's view, and agreement is not required if the basis is reasonable.
Saying a dissenting member must always remove their name.
Students overapply the dissent rule.
Fix: Name removal is for cases where the member believes the basis is inadequate and their dissent is not reflected. Mere disagreement does not trigger it.
Thinking a member who dissents internally but stays silent in the published report is fine.
Students treat private disagreement as enough.
Fix: If the member believes the work lacks a reasonable basis, leaving their name attached may imply endorsement, so they should consider removing it.
Assuming reliance on the group excuses all personal diligence.
Students read the allowance for group work as a blanket safe harbor.
Fix: The member may rely on group work, but the process must still be diligent and thorough. Obvious red flags must not be ignored.
Confusing V(A) with V(B) or II(A).
Group settings suggest communication or inside information.
Fix: If the issue is whether the analysis has a reasonable basis, it is V(A). Use V(B) only when the issue is how results are communicated.

Worked examples

Example 1

A research team of five analysts at a global asset manager publishes a Buy rating on a European airline. Analyst Lena believes the stock is fairly valued and would have rated it Hold. She agrees the team's valuation model was built carefully and used sound, well-supported assumptions. The team votes 4-1 for Buy. According to Standard V(A), Lena should most appropriately:
A. remove her name from the report.
B. remain associated with the report without dissenting.
C. publish a separate Hold rating immediately.

Show the solution

Identify the issue: group research and a dissenting member, so Standard V(A).
Find what Lena objects to: only the rating. She accepts that the model and assumptions were sound.
Apply the rule: a member need not agree with every conclusion if the work has a reasonable and adequate basis and was done with diligence.
Check A: name removal applies when the basis is inadequate and dissent is not reflected. That is not the case here.
Check C: nothing in the standard requires publishing a separate rating. This overstates the duty.

Answer: B. Lena may remain associated with the report without dissenting, because the group's work has a reasonable basis.

Example 2

An investment committee at a fund manager approves a position in a small-cap company. Committee member Raj reviews the analyst's file and finds that the revenue forecast relies on one unverified source and that no cash flow analysis was done. He objects, but the committee approves the position anyway and the minutes do not record his objection. Under Standard V(A), Raj should most appropriately:
A. consider removing his name from the committee's decision.
B. accept the decision because the committee reached a majority.
C. take no action because the committee did not ask for his name on the report.

Show the solution

Identify the standard: group decision making, so V(A).
Classify Raj's objection: it concerns the basis and process (unverified source, no cash flow analysis), not just the conclusion.
Conclude that the basis appears inadequate, so Raj should dissent.
His dissent was not reflected in the minutes, so staying associated could suggest he endorses the decision.
Check B: majority approval does not create a reasonable basis. Check C: association with the decision still matters.

Answer: A. Raj should dissent and, since his dissent is not reflected, consider removing his name from the decision.

Exam tips

Look for the trigger words 'group', 'committee' or 'team', which signal this guidance.
Decide first whether the stem describes disagreement with a conclusion or a belief that the basis is inadequate. The answer follows from that.
Prefer conditional answers over absolute ones such as 'must always dissent' or 'must resign'.
Expect the options to use the exact stem facts. Match them to the Handbook wording, not common sense.
Watch for Standard I(C) as a secondary issue when a name stays on work the member thinks is unsound.

Practice questions from Guidance for Standard V: Investment Analysis, Recommendations, and Actions

Group Research and Decision Making in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Group Research and Decision Making: frequently asked questions

Can a member dissent from group research under CFA ethics?

Yes. A member who believes the work lacks a reasonable and adequate basis should dissent. If the dissent is not reflected in the output, the member should consider removing their name from the report or decision.

Do I have to agree with the group's conclusion under Standard V(A)?

No. If the group's work has a reasonable and adequate basis and was done diligently, a member may stay associated with it even if they would have reached a different conclusion.

When must a member remove their name from a group recommendation?

The guidance points to cases where the member believes the basis is inadequate and their dissent is not reflected in the final work. In that case, staying associated could imply endorsement.

Which standards apply to group research besides V(A)?

Standard V(A) is the main one. Standard I(C) Misrepresentation can also apply if a member leaves their name on work they believe lacks a reasonable basis.