Fair dealing
Giving every entitled client a fair opportunity to act on a recommendation, so none is systematically served first. It does not mean treating everyone identically — different service levels are allowed if disclosed.
Where you will meet it
Fair dealing appears in 5 learning outcomes on the CFA syllabus. A few of them:
- Use Standard III (Duties to Clients) to judge a case
“Fair dealing means recommendations and changes reach all clients fairly — not identically, since mandates differ, but with nobody systematically served last.”
- Explain what the Code and Standards expect of members ethically, covering every standard and its subsections
“Duties to Clients cover loyalty, fair dealing, suitability, performance presentation and confidentiality, and Duties to Employers cover loyalty, additional compensation and supervision.”
- Assess whether a firm's trading processes, disclosures and records meet good governance standards
“It should set how brokers and venues are chosen and reviewed, how orders are allocated fairly across client accounts (such as pro rata for partial fills, as recommended under Standard III(B) Fair Dealing), how conflicts such as soft-dollar arrangements, cross trades and personal dealing are handled, and how trade errors are corrected.”
- Propose practices and procedures that head off breaches of the Code and Standards under Standard III, Duties to Clients
“Fair dealing is best protected by a written allocation policy fixed before orders go out: allocations recorded on time-stamped tickets, partial fills shared pro rata at the average price, and hot issues offered only to accounts for which they are suitable, with employee accounts last.”
Practise it
Practise fair dealing until it is automatic: questions that explain every wrong option.
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