CFA Level I · CFA Level I Exam · Guidance for Standard V: Investment Analysis, Recommendations, and Actions
Tomas Berger is part of a team that produces a group recommendation on a utility company. He concludes that the team's consensus rests on a peer-group comparison that is clearly inappropriate and that the conclusion lacks a reasonable and adequate basis. His team leader declines to revise it. Under Standard V(A), Berger is most likely required to:
Berger should dissociate from the report. The allowance to stay associated with a differing group view applies only when the member believes the consensus has a reasonable and adequate basis and is independent and objective. Here he believes the basis is inadequate, so staying on the report would breach Standard V(A).
- Aaccept the report because group consensus overrides individual views
- Bdissociate from the report because the consensus lacks a reasonable basisCorrect
- Cremain on the report as long as he records his disagreement internally
Explanation
The exemption from dissociating applies only when the member believes the consensus has a reasonable and adequate basis and is independent and objective. Berger believes it lacks that basis, so he cannot simply accept it. Recording disagreement internally does not satisfy the standard while his name remains on the report.
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