ethics - gifts

i’m having a tough time wrapping my head around the gift issue for members. here is what i know for sure: -if someone gives you a gift that influences your objectivity, this is a violation -gifts that are based on future performance DEFINITELY affect objectivity and are thus violations -gifts from people to whom the member does not provide investment services are ok my questions are: -when do you need approval for gifts as opposed to simple disclosure? -are gifts from clients ok? some of the schweser answer explanations seem to suggest so.

I hate ethics. I should quit my planner job and go back to being a broker.

Gifts from those you do business with = soft dollars. Should not accept lavish gifts from those you do business with. Gifts from client, “Thanks for a great year!” = ok if you disclose to your employer. Gifts from client, “You can use my boat if I make 40% return this year.” = Ok if and only if you disclose AND receive permission from your employer in writing prior.

QuantJock_MBA Wrote: ------------------------------------------------------- > Gifts from those you do business with = soft > dollars. Should not accept lavish gifts from > those you do business with. > > Gifts from client, “Thanks for a great year!” = ok > if you disclose to your employer. > > Gifts from client, “You can use my boat if I make > 40% return this year.” = Ok if and only if you > disclose AND receive permission from your employer > in writing prior. Last one I don’t think is correct. It will encourage risk taking possibly not line with IPS.

> Gifts from client, “You can use my boat if I make > 40% return this year.” = Ok if and only if you > disclose AND receive permission from your employer > in writing prior. I don’t know if I agree w/ this because it depends on future performance. I think that this would be okay if it were “You can use my boat because I made > 40% return this year.”

I’m 99% sure it is correct. The reason prior permission is needed is regarding fair dealings with clients could be compromised. If I’m wrong, please point me to the right place in the CFAI SOPH handbook (I’m wrong just as often as I’m right).

When you disclose a gift from a client for past performance, do you need to disclose it in writing or is verbally ok?

that’s my question - i’ve seen instances where your employer approves but it’s still a violation. i guess if the gift blatantly affects objectivity, CFAI rules supercede supervisor approvals?

disclose both in writing. I think quant is right, if you disclose a future gift in writing and get permission it is cool (it just shouldnt influence you objectivity, i.e i will let you use my beach house in the hamtpons if that report comes out well for my company). CFAI goes back and forth on crap like this tho… One question it will be you had written permission so it was ok. In another question it will tell you that trying to get to 40% may cause unnecessary risks and treat that client better than others…

"I think quant is right, if you disclose a future gift in writing and get permission it is cool (it just shouldnt influence you objectivity, i.e i will let you use my beach house in the hamtpons if that report comes out well for my company). " can’t you make the argument that the potential use of the beach house will influence the analyst’s objectivity (eg produce a more positive report than what would be realistic)?

I think they will try to make it clear whether you have a future compensation agreement that can be shown to your boss (who will decide if it’s appropriate or not) or whether there is an Indecent Proposal that’s being offered to you that you must reject, even if he is a client and not an outside company.

quant is right. You need to disclose that to your supervisor before you accept it

bump the 99% to 100%