标题: Schweser and CFA ethics conflict? [打印本页] 作者: BC_MBA_student 时间: 2011-7-13 16:34 标题: Schweser and CFA ethics conflict?
Example from Schweser
In return for receiving account management business from Broker X, a member directs trades to Broker X on the accounts referred to her by Broker X as well as on other accounts as an incentive to Broker X to send more account business.
Now this is obviously wrong..
the comment is
This is a violation if Broker X does not offer the best price and execution ""or if the practice of directing trades to Broker X is not disclosed to clients"". The obligation to seek best price and execution is always required unless clients provide a written statement that the member is not to seek best price and execution and that they are aware of the impact of this decision on their accounts.
This makes it sounds like you can direct brokerage for referral as long as clients are notified which seems to be wrong.
CFAI says
An Investment Manager may not allocate a Client's Brokerage based on the amount of Client referrals the Investment Manager receives from a Broker.
Am i missing something here or is schweser wrong here?作者: scarecrow 时间: 2011-7-13 16:34
I think it's just saying that your primary reason for directing client brokerage must not be to receive referrals. Assuming you have a justified (ethical) basis - best execution costs for instance - the referrals benefit to you is secondary... and becomes acceptable assuming the relationship is disclosed to all clients and prospective clients.
That's my take anyway.作者: wxs1986 时间: 2011-7-13 16:34
Seems like it sounds like he's still using client dollars to pay for referrals. Anyone else have a take?作者: iteracom 时间: 2011-7-13 16:34
I agree that this is a confusing explanation the points I think they are trying to make are that:
1) It is ok to get referrals from a broker, as long as you would have been using that broker anyway.
2) If a client wants you to use a broker who doesn't offer best price/execution, you need to get that from them in writing.作者: giants2010 时间: 2011-7-13 16:34
I would say it does read obviously wrong. The question is worded such that what it does seem like a direct ethical lapse.
There should have been a statement added that the broker does give Best execution at lowest cost or whatever to justify the broker's stance. Else any normal reader will assume that the guys together are milking the clients.
