Question about ethics

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pecslikecannons

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This concept has been bugging me, and I couldn’t the exact same scenario in any of the mocks I took. Google search revealed nada. I am just curious; no further implications.
Do you have to disclose non fee paying referral arrangements? Say I am a PM and I refer service to my accountant/mechanic/hair dresser friend who refers clients to me. No money is exchanged hands of course, just referrals, but am I in violation if I do not disclose this to clients/prospective clients? Does this referral exchange count as additional compensation, or is it just a conflict of interest thing?
The standards strictly state that all extra compensation arrangements HAVE to be disclosed. Fair enough. And also conflicts of interest. But how about NON FEE referral arrangements?
Cheers
 
You do - you need to act in the best interest of your clients at all times. If you’re referring them to someone providing a service who may not be the best option for them, but you do so because they are, in return, referring clients to you; then your objectivity may be clouded and the client may be better off using a different firm/person for that service
thus, you must disclose.
 
Yeah I get that you need to disclose a conflict of interest, but would you also need to disclose this as additional compensation? Even if no money is changing hands?
 
If you receive any benefit (nominal or otherwise) it would be conisdered an additional compensation arrangement. In the case of the hair dresser if she cuts your hair for free, that is a form of compensation.
 
msc2488 wrote:
If you receive any benefit (nominal or otherwise) it would be conisdered an additional compensation arrangement. In the case of the hair dresser if she cuts your hair for free, that is a form of compensation.
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Not quite.
 
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