Additional compensation arrangement

Under Standard IV(B), any gift, benefit or payment that competes with, or could reasonably be expected to create a conflict with, the employer's interest. It needs written consent from all parties involved first.

Where you will meet it

Additional compensation arrangement appears in 2 learning outcomes on the CFA syllabus. A few of them:

• Explain what the Code and Standards expect of members ethically, covering every standard and its subsections
  CFA Level II · Ethical and Professional Standards

  “Duties to Clients cover loyalty, fair dealing, suitability, performance presentation and confidentiality, and Duties to Employers cover loyalty, additional compensation and supervision.”

• Show firm command of the Code and Standards by applying them to professional integrity cases under Standard IV, Duties to Employers
  CFA Level III · Ethical and Professional Standards

  “Under IV(B), a client's offer of a bonus for beating the benchmark is additional compensation that needs written consent from all parties involved, both her employer and the client offering it, since it could skew effort towards that account; a documented email can count.”

Practise it

• Today's practice question One question, with every wrong option explained.
• Free Level I diagnostic test Twelve questions that show which topics to start with.
• Free finance calculators Check your arithmetic on the exam's core formulas.

All terms beginning with A · Glossary