Referral Fees

See example 4 on page 101 CFAI I. Is it a violation of of VI© to not disclose additional compensation for referral to firm products? The text is rather vague.

yes it is referal arrangement should be disclosed to employer, prospects, clients. The text in the first example or second also mentions it should be in “writing”.

Example 2 has to do with someone in the trust department referring trust clients to the brokerage department. Example 4 has to do with a brokerage employee steering existing or new clients into specific firm brokerage products. The text states that “best practice” is to disclosure the additional comp, but it doesn’t specifically say that failure to disclosure is a violation.

Ahh yes I think if you refer firm products in other divisions etc, you need to disclose. As they say if it is not clear that there is an underlying benefit for you to refer --> need to disclose