{"id":884,"date":"2019-10-10T20:04:00","date_gmt":"2019-10-10T20:04:00","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=884"},"modified":"2025-12-29T18:48:08","modified_gmt":"2025-12-29T18:48:08","slug":"standard-6c-referral-fees","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/ethical-and-professional-standards\/standard-6c-referral-fees\/","title":{"rendered":"Standard VI(C) \u2013 Referral Fees"},"content":{"rendered":"\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"QAPage\",\n  \"mainEntity\": {\n    \"@type\": \"Question\",\n    \"name\": \"Is Zoe Mattieu in violation of Standard VI(C) \u2013 Referral Fees?\",\n    \"text\": \"Zoe Mattieu makes it clear to all clients that she pays a flat fee of $500 for referrals to her firm. She prefers to make this information known to clients and prospective clients via verbal announcement during their first face-to-face meeting. Beyond this, there is no other communication regarding a referral policy made by Mattieu. Her firm has not seen fit to change this policy, as it receives a high number of referrals each year. Which of the following statements is most likely correct? A. Mattieu is in violation of Standard VI(C) \u2013 Referral Fees. B. Mattieu has not violated any Standard. C. Mattieu has violated Standard III(C) \u2013 Loyalty and prudence.\",\n    \"answerCount\": 1,\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"The correct answer is A. Zoe Mattieu is in violation of Standard VI(C) \u2013 Referral Fees because, although she discloses her firm's referral program, she does so verbally instead of in written form. Standard VI(C) requires that information related to referral fees be provided in writing and signed by both parties.\"\n    }\n  }\n}\n<\/script>\n\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"VideoObject\",\n  \"name\": \"Standard VI \u2013 Conflicts of Interest (2024\/2025 Level I CFA\u00ae Exam \u2013 Ethics \u2013 Module 3)\",\n  \"description\": \"This CFA Level I Ethics video covers Standard VI \u2013 Conflicts of Interest. It explains the importance of full disclosure in situations involving potential conflicts, such as personal stock ownership, family relationships, board memberships, and referral fees. It emphasizes that disclosure should be clear, timely, and shared with clients, employers, and compliance departments. The lesson also covers priority of transactions, front running, and restrictive trading policies. Several example scenarios are used to highlight violations and best practices for maintaining integrity and transparency in professional conduct.\",\n  \"uploadDate\": \"2022-08-27T00:00:00+00:00\",\n  \"thumbnailUrl\": \"https:\/\/i.ytimg.com\/vi\/ed0Apg79UWs\/hqdefault.jpg\",\n  \"contentUrl\": \"https:\/\/www.youtube.com\/watch?v=ed0Apg79UWs\",\n  \"embedUrl\": \"https:\/\/www.youtube.com\/embed\/ed0Apg79UWs\",\n  \"duration\": \"PT19M03S\"\n}\n<\/script>\n\n\n\n<iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/ed0Apg79UWs?si=wDimoqDix81eFTb0\" title=\"YouTube video player\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n\n\n<p>Standard VI(C) \u2013 Referral Fees requires CFA members to report to employers and clients any sums received from or paid to recommendations of products or services.<\/p>\n<h2>Compliance<\/h2>\n<p>Appropriate disclosure means communicating\u00a0<em>before<\/em> an investment professional enters into a contract with a client or a prospective client. The reporting of referral fees includes the type (i.e., flat fee, percentage of the business) and estimated value. This should be done in writing, with both parties signing a written agreement.<\/p>\n<p>Disclosure of fees received from or paid to recommendations of products or services allows employers and clients to evaluate any potential bias that may arise from referral fees.<\/p>\n<h2>Violation<\/h2>\n<p>A firm should adopt a clear policy related to the acceptance and disclosure of referral fees to avoid violations. This may include a complete restriction of such fees.<\/p>\n<p>Individual members must be clear on what constitutes a referral and that the exchange of dollars is not required to qualify as such. For example, if a company refers its tax-exempt accounts to a member\u2019s firm in exchange for a regular investment recommendation and research report, the member has entered into a referral arrangement.\u00a0 Therefore, this information must be disclosed to avoid violation of sums received from or paid to product or service recommendations.<\/p>\n<blockquote>\n<h2>Question<\/h2>\n<p>Zoe Mattieu makes it clear to all clients that she pays a flat fee of $500 for referrals to her firm.\u00a0 She prefers to make this information known to clients and prospective clients via verbal announcement during their first face-to-face meeting. Beyond this, there is no other communication regarding a referral policy made by Mattieu. Her firm has not seen fit to change this policy, as it receives a high number of referrals each year. Which of the following statements is most likely correct?<\/p>\n<p>A. Mattieu is in violation of Standard VI(C) \u2013 Referral Fees.<\/p>\n<p>B. Mattieu has not violated any Standard.<\/p>\n<p>C. Mattieu has violated Standard III(C) \u2013 Loyalty and prudence.<\/p>\n<p><strong>Solution<\/strong><\/p>\n<p>The correct answer is A.<\/p>\n<p>Zoe Mattieu is in violation of Standard VI(C) \u2013 Referral Fees because, although she communicates her firm\u2019s referral program to clients, she does so verbally instead of via written communication. Standard VI(C) \u2013 Referral Fees indicates that information related to referral fees is required to be written, and signed by both parties.<\/p>\n<\/blockquote>\n\n","protected":false},"excerpt":{"rendered":"<p>Standard VI(C) \u2013 Referral Fees requires CFA members to report to employers and clients any sums received from or paid to recommendations of products or services. Compliance Appropriate disclosure means communicating\u00a0before an investment professional enters into a contract with a&#8230;<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-884","post","type-post","status-publish","format-standard","hentry","category-ethical-and-professional-standards","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Standard VI(C) - Referral Fees | CFA Level 1 - AnalystPrep<\/title>\n<meta name=\"description\" content=\"Learn CFA Standard VI(C) on referral fees, which requires disclosure of any compensation received for recommending products or services.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/ethical-and-professional-standards\/standard-6c-referral-fees\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Standard VI(C) - 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