CFA Level I · CFA Level I Exam · Guidance for Standard I: Professionalism
An investment manager has a long-standing client who offers her a year-end bonus in addition to the agreed fees as thanks for strong performance. Under Standard I(B), the manager should most appropriately:
She should disclose the offered bonus to her employer before accepting it. Standard I(B) guidance treats client gifts as possible supplementary compensation, but disclosure lets the employer independently determine whether the gift could affect her independence and objectivity. If prior notice is impossible, disclose afterward.
- Adecline it, because any client bonus compromises objectivity
- Bdisclose the offered bonus to her employer before accepting itCorrect
- Caccept it and disclose only if other clients ask about it
Explanation
A client gift can be seen as supplementary compensation rather than an attempt to influence her to the detriment of other clients. Before accepting, members should disclose such benefits to their employer so it can judge the effect on independence. Acceptance is not automatically prohibited.
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