CFA Level I · CFA Level I Exam · Guidance for Standard III: Duties to Clients
Weng emails a new recommendation to all his clients. He then phones his three largest institutional clients to discuss it in detail, and they pay him for the personal outreach. Weng's conduct is most likely:
Weng's conduct is consistent with Standard III(B). He disseminated the recommendation to all clients first, and the later personal calls were paid-for additional service to larger clients. Differentiated service is allowed when it does not disadvantage other clients.
- Aa violation because the largest clients got extra attention
- Bconsistent with Standard III(B) because he disseminated widely firstCorrect
- Ca violation because different service levels are always prohibited
Explanation
Weng distributed the recommendation to all clients before discussing it with a select few. Members may provide more personal service to clients who pay for it. Calling the select group first would have been a violation.
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