Ethics: Disclosure of Gifts

I’ve seen some question inconsistency on this topic. Gifts from an existing client. Do ALL gifts need to be disclosed to an employer? I’ve seen explicity reference to ‘nominal gifts’ (e.g. a baseball cap) being okay to leave undisclosed… then I’ve also seen other questions state ALL gifts need to be disclosed. Also, does the employeer need to acknowledge the gift in any way… similar to the need for written approval of additional compensation arrangements with existing clients? Thoughts?

All compensation for referrals needs to be disclosed to the concerned party! Nominal gifts from clients are okay, they need NOT be disclosed to the employer. Hope this clarifies.

See, I thought nominal gifts did not need to be disclosed, but I just got a question wrong on Exam 2 AM because of that point. They said it DID need to be disclosed.

mcf Wrote: ------------------------------------------------------- > > Also, does the employeer need to acknowledge the > gift in any way… similar to the need for written > approval of additional compensation arrangements > with existing clients? > > Thoughts? Need to have written approval, not just a verbal approval. I think that I remember seeing a question that refered to that.

Hmm, see, I also think that is wrong. I think gifts need to be disclosed but not acknowledged in writing. Compensation must be acknowledged in writing by employer. Lastly, taking on advisory work outside of you main employment must also be acknowledged in writing by both employer and outside clients.

i believe written approval is only required when you are taking another job while at the same time keeping your job. Compensation/gifts only need to be disclosed.

I think if you received the gift-as in the client gives you a hat, you are fine. However if the client says he will give you the hat if you beat the index this year that needs to be disclosed.

This exam question stated that the client gave you a nominal thank you gift for treating the client to dinner… and that failure to disclose the thank you gift was a violation.

ok so basically, that’s what i understand… please confirm!!! Gifts from clients need to be Disclosed, whether they are nominal or lavish. Gifts from other people NOT accepted. Additional compensation: WRITTEN consent from employer Advisory work outside of you main employment that either competes or time consuming: WRITTEN consent from employer Outside work thats Not related to work and Not time consuming: NO NEED TO DISCLOSE? I cant believe the hardest part of the exam is ethics!!

mcf, often there are slight differences betwen the guidance and recommended procedure. In your example, the the recommended procedure is to report all the gifts to the employer. But the guidance is it is still okay that you recieve nominal gifts. So the best practice is to follow the recommended procedure. You may also wanted to look at what the question is asking for. If they are emphazising the guidance or the recomended procedure.

can someone please point me in the direction (cfai or schweser) where they talk about not having to disclose nominal gifts (only a recommendation). i agree with mcf that additional compensation for outside work needs to be disclosed to the employer and written consent must be gotten. however, i believe that gifts/referrals must be disclosed to employer (not in writing)