Brian Bellow, a CFA Institute member, is a portfolio manager for Progressive Trust Company. Several friends asked Bellow to review their investment portfolios. On his own time, Bellow examined their portfolios and made several recommendations. He received no monetary compensation from his friends for his investment advice and provided no future investment counsel to them. According to CFA Institute Standards of Professional Conduct, did Bellow violate his duty to Progressive Trust? A) No, because Bellow provided no ongoing investment advice. B) No, because Bellow provided investment advice to his friends. C) No, because Bellow received no monetary compensation for his services. D) Yes, because he undertook an independent practice that could result in compensation or other benefit to him. Answer is D, I chose A. I don’t see how D is the answer. He didn’t receive any compensation and provided no future counsel.
C
A is incorrect because the standard says nothing about ongoing investment advise B is incorrect because the standard doesn’t say anything about relationship with the client (it’s about compensation) C is incorrect because compensation doesn’t have to be monetary D is correct because there could be a potential compensation (free tickets to the Bears game) -> violation the way I would’ve solved on the exam. A and C are obviously incorrect, then between B and D, D makes a stronger case I hope that helps.
Thanks for the explanation dude. maratikus Wrote: ------------------------------------------------------- > A is incorrect because the standard says nothing > about ongoing investment advise > B is incorrect because the standard doesn’t say > anything about relationship with the client (it’s > about compensation) > C is incorrect because compensation doesn’t have > to be monetary > D is correct because there could be a potential > compensation (free tickets to the Bears game) -> > violation > > the way I would’ve solved on the exam. A and C > are obviously incorrect, then between B and D, D > makes a stronger case > > I hope that helps.
I think the key is to remember that compensation does not have to be monetary, so he could get any sort of non-monetary gift from his friends, which could influence his decisions and priorities.
“HIIII!! I’M BRIAN FELLOWS”