can someone please expain what this means “Standard V requires that XYZ not use brokerage from another client account to pay for a product or service purchased under the client directed brokerage arrangement” got this straight from the CFAI text
some clients ask for their business to be conducted by specific brokers, because they are related or they get certain extra services e.g. industry reports. but for the broker to also provide the manager with research it may require high volumes of trading which the client alone can not suffice and the manager may be tempted to send other clients trades to this prefered broker just to meet the volumes. this is not allowed because the broker may not necessarily provide best execution and its serving the interest the first client only