Finance Train LogoFinance Train
Learning LibraryTemplatesBlog
Data Science Bundle
Finance TrainFinance Train
Learning LibraryTemplatesBlog
Data Science Bundle
Lesson 21 of 22

Standard VI (C) - Referral Fees

This standard states that if a member receives any referral fees (compensation or benefit) for recommending a product or service, he must disclose it to the concerned people such as employer and clients.

Examples of Violation

  • Example 1: A manager working for a bank has an arrangement with a brokerage firm, where the brokerage firm gives him a referral fee for every person to open an account with the brokerage firm. The manager refers several of his bank clients to the brokerage firm. However, he does not disclose this arrangement to his bank. This is a violation of the standard.
  • Example 2: An investment firm’s trading desk conducts its business with a variety of brokers. The portfolio manager in that firm tells the trading desk to direct a large portion of its trades to one of his friend’s brokerage firm. The brokerage firm in return of this favour, recommends the investment firm’s advisory services to its own clients. This arrangement is not disclosed to the portfolio manager’s firm or to the clients of the brokerage house. This is a violation of the law.
Previous Lesson

Standard VI (B) - Priority of Transactions

Next Lesson

Guidance for Standard VII – Responsibilities of a CFA Institute Member or CFA Candidate

Back to ebook

Guidance for Standards I - VII

22 lessons

Lessons

1
Seven Standards of Professional Conduct
2
Standard I (A) Professionalism - Knowledge of the Law
3
Standard I (B) Professionalism - Independence and Objectivity
4
Standard I (C) Professionalism - Misrepresentation
5
Standard I (D) Professionalism - Misconduct
6
Standard II (A) - Material Non-public Information
7
Standard II (B) - Market Manipulation
8
Standard III (A) - Loyalty, Prudence, and Care
9
Standard III (B) - Fair Dealing
10
Standard III (C) - Suitability
11
Standard III (D) - Performance Presentation
12
Standard III (E) - Preservation of Confidentiality
13
Standard IV (A) - Loyalty
14
Standard IV (B) - Additional Compensation Arrangements
15
Standard IV (C) - Responsibilities of Supervisors
16
Standard V (A) - Diligence and Reasonable Basis
17
Standard V (B) - Communication with Clients and Prospective Clients
18
Standard V (C) - Record Retention
19
Standard VI (A) - Disclosure of Conflicts
20
Standard VI (B) - Priority of Transactions
21
Standard VI (C) - Referral Fees
22
Guidance for Standard VII – Responsibilities of a CFA Institute Member or CFA Candidate
Finance Train

Learn data science and AI skills for finance through practical courses and tutorials.

Learn

  • Learning Library
  • Course Directory
  • Blog

Resources

  • Templates & Downloads
  • Tools
  • Tables
  • Calculators

Company

  • About
  • Contact
  • Privacy
  • Terms

© 2026 Finance Train. All rights reserved.