After working as an equity research analyst for five years at Staple Asset Advisers, Davika Ravinder, CFA, receives a promotion to a junior asset manager position. She is given 20 relatively small portfolios, all involving middle-income clients who are saving for their children’s university educations and their own retirements. With her new position, Ravinder is given a higher base salary. Previously, her bonus was based on annual performance. She is now eligible for a percentage of the quarterly performance fee earned by the firm for returns higher than the client-negotiated performance hurdles. For competitive reasons, Staple does not allow any employee to disclose their compensation packages, including how bonuses are derived.
With regard to Ravinder’s new compensation package, which of the following actions would be most appropriate to ensure she complies with the CFA Institute Standards of Professional Conduct? She should:
- ask her clients to renegotiate their contracts with the firm.
- renegotiate her compensation package.
- disclose her new compensation package to her clients.
B is correct. Recommendations for Standard VI(A)–Disclosure of Conflicts advises that employee compensation packages based on short-term performance be disclosed to clients, which is currently not allowed by Ravinder’s employer. Thus, she should renegotiate her compensation package to either remove the performance aspect of the structure so she can disassociate from the practice or seek to lengthen the performance period assessed to, at minimum, one year. If Ravinder disclosed the compensation package to her clients without her employer's permission, she would be in violation of Standard IV(A)–Loyalty. If she asked her clients to renegotiate their contracts, she may potentially violate Standard III(A)–Loyalty, Prudence, and Care because the new contracts may not be as favorable as the current contracts, thus potentially harming her clients.
不是特别理解这个行为,请老师帮忙解释这个B选项