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CFA Level I · CFA Level I Exam · Guidance for Standard VI: Conflicts of Interest

Which disclosure of a conflict of interest to clients is most consistent with Standard VI(A)?

A prominent plain-language statement that effectively communicates the relevant information is consistent with Standard VI(A). Disclosures must be prominent, in plain language and effective, so burying them in legal terms or never updating them after material change does not satisfy the standard.

  1. AA prominent statement in plain language that communicates the relevant information effectivelyCorrect
  2. BA detailed technical note placed within lengthy legal terms, as the conflict is disclosed there
  3. CA single disclosure at account opening that is never revisited, as it was once made

Explanation

Disclosures must be prominent, delivered in plain language and communicate the information effectively. Burying the conflict in legal text or never updating a materially changed conflict falls short of this.

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