Full and fair disclosure
Disclosure made prominently, in plain language and effectively, so the reader understands the conflict and how it has been mitigated. A buried footnote does not qualify, and disclosing never excuses what another Standard forbids.
Where you will meet it
Full and fair disclosure appears in 3 learning outcomes on the CFA syllabus. A few of them:
- Put Standard VI(A), on avoiding or disclosing conflicts, into practice
“Standard VI(A), retitled Avoid or Disclose Conflicts in the 12th edition, requires members to avoid, or make full and fair disclosure of, all matters that could reasonably be expected to impair their independence and objectivity or interfere with their duties to clients, prospective clients and employer.”
- Explain what the Code and Standards expect of members ethically, covering every standard and its subsections
“The revision that took effect on 1 January 2024 added Competence as I(E), added a duty under V(B) to disclose the nature and cost of services, and reworded VI(A) so that conflicts must be avoided or given full and fair disclosure.”
- Show firm command of the Code and Standards by applying them to professional integrity cases under Standard VI, Conflicts of Interest
“Under VI(A) members and candidates must avoid conflicts or make full and fair disclosure of them, avoidance being preferred where reasonably possible, and one that remains must be disclosed prominently and in plain language: a manager steering client money into the firm's own funds, an incentive fee that rewards extra risk-taking, a board seat at a portfolio company, or a personal holding in the same thinly traded stock.”
Practise it
Practise full and fair disclosure until it is automatic: questions that explain every wrong option.
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