Standard V: Analysis, Recommendations, and Actions
About this episode
Standard V of the CFA Institute Code of Ethics and Standards of Professional Conduct, Investment Analysis, Recommendations, and Actions, is about the work behind a recommendation, not the outcome. In a two host format, one host explains the material while the other plays a fictional exam candidate, and together they reason out loud through the three pieces the exam tests: do the work, tell the truth, and keep the proof. That means a reasonable and adequate basis before you recommend or act (V-A), communicating honestly and separating fact from opinion (V-B), and keeping the records that show your work (V-C). Using fully fictional scenarios, they work the traps the exam is built around, so you learn to reason through a vignette instead of guessing at it.
In this episode
Standard V, Investment Analysis, Recommendations, and Actions, is about the work behind a recommendation, not the outcome, and this episode works through its three sub-standards with fully fictional scenarios.
Standard V(A), Diligence and Reasonable Basis, covers the work you owe before recommending or acting: a reasonable and adequate basis, grounded in the situation. The hosts reason through what that means when a tip, a model output, or a group decision is the only thing behind a recommendation.
These are points about how the CFA Institute Standards analyze the scenarios for exam purposes, not legal or compliance advice. Actual research, disclosure, and recordkeeping rules depend on applicable law and the specific facts.
Standard V(B), Communication with Clients and Prospective Clients, addresses telling the truth in what you present: separating fact from opinion, keeping what you communicate consistent with the characteristics of what you recommend, and not promising what you cannot deliver.
Standard V(C), Record Retention, covers keeping the records that show your work. The hosts reason through why the records belong to the firm, what to keep, and why the proof you keep is what lets you answer for a recommendation later.
The episode points listeners to the free 90 question practice exam at tottenprep.com.
What this episode covers
- Standard V(A) Diligence and Reasonable Basis: doing the work before you recommend or act.
- Standard V(B) Communication with Clients and Prospective Clients: separating fact from opinion.
- Standard V(C) Record Retention: keeping the records that show your work.
- The three piece test: do the work, tell the truth, and keep the proof.
Frequently asked questions
What does CFA® Standard V cover?
Standard V of the CFA Institute Code of Ethics and Standards of Professional Conduct covers Investment Analysis, Recommendations, and Actions: V(A) Diligence and Reasonable Basis, V(B) Communication with Clients and Prospective Clients, and V(C) Record Retention.
What is a reasonable and adequate basis?
For exam purposes, a recommendation needs work behind it: a reasonable and adequate basis before you recommend or act. The episode reasons through what that means with fictional scenarios, including tips, group decisions, and model outputs. This is exam-prep framing, not investment advice.