2011 cfai mock question 8

I think this question was bull. How are they not violating additional comp. Arrangements when the Rayne employees don’t disclose the competition to their clients? The cfai explanation makes no sense to me because Rayne is a stand alone licensed brOkerage so the employer of the sales agents is Rayne and not OAM. Further, they are clearly being comPensated by OAM fOr peddling their funds so this should be disclosed tO the clients of Rayne.

That’s just the way the world works. In real life brokers get higher commissions on certain assets, ie: life insurance. Doesn’t mean they have to disclose it to the person they’re selling it to. As long as the compensation is internal, no disclosure is needed.

because Additional comp. arrangements is in Duties to employers section of the code

Additional comp arrangements typically refer to activities outside the scope of the business, such as being mayor in one example. In addition, anyone working with a broker should be aware they are commissioned sales agents. I could see your point if this was a pm, but it is pretty clear the way things were laid out.

the whole point here was that it cant be additional compensation because this refers to not informing your employer of outside employment/compensation. this requirement does not apply to clients (duties to clients may have similar requirements but as far as that standard goes, it only applies to employers)

reviving an old thread here - but does anyone know which standard would apply if the question was talking about sales credits than the sales team get?

so let’s say the sales team receieve commision of x% from getting clients in. That would have to be disclosed to all clients. However if they didn’t then what specific code would they be violating?


Where are you getting the afternoon paper from please? I could only get morning from CFAI website

if before you started to call others “smart asses” u saw the original date of the post and then opened your smart mouth, every one would have been better served.

Folks here have previous papers since they took the exam in the past. But, no, those papers cannot be lent out due to copy right issues.

thanks for asking

who are you? what past papers? Tell me am wrong but CFA didn’t put out an afternoon mock this year. did they last year? gees, how about a straight answer instead?

There is a 2012 Afternoon MOCK - if you decided to go to the CFAI and look for yourselves.

there has been a mock every year for the past 3 years at least. If folks downloaded older ones or printed them out then, they have them, but cannot share.