Quick Ethics question first, his, question, personal, previous

Kiakaha

Fred Brubacher, CFA, is an analyst at Van City Bank (VCB). Brubacher receives compensation for referrals to the bank’s brokerage and personal financial-planning divisions. His recent referrals are long-time clients from his previous employer, and Brubacher does not mention VCB’s referral arrangement. Does Brubacher violate any CFA Institute Standards?
A. No.
B. Yes, with respect to misrepresentation.
C. Yes, with respect to conflicts of interest
answer is C. I thought C at first, but then I thought that the readings said if your referring people to divisions in the same company it should be obvious and implied you are going to receive some form of compensation and that disclosure is not necessary. But this still constitutes a conflict of interest??

kingstongal

I believe disclosure of addl remuneration is mandatory in all cases (be it to the client or the employer depending on the circumstances). The client has a right to know of any incentives Brubacher has in bringing in their business. Also I don’t understand your cross-selling reference as these clients were brought in from the outside through Brubacher’s existing relationships.