Practical Examples of CFA Ethics and Standards of Professional Conduct

Making sense of CFA Ethics and Standards of Professional Conduct

Ethics is definitely a hot topic in the CFA program. This material comes back on all three levels and becomes increasingly important as the candidate progresses through the program and towards the CFA designation. While there are no clear indication on just how critical the Ethics part is on the exam, its generally agreed that if you fail ethics (score under 50%) the chances of you passing the exam are greatly reduced. The CFA Institute prides itself on the integrity and professionalism of its members, so you should not underestimate this part and you must understand it before writing the exam.

Most candidates struggle with Ethics because candidates often use subjective interpretations of the situations and guiding principles. Ethics are not easy to understand and you might often find yourself in a situation where either no particular answer choice seems appropriate or you might find there could be more than one answer to a particular problem. We found that the most practical solution is to avoid over analyzing the particular situation and be as objective as possible with the answer choices.

Before the exam, make sure you understand each standard separately and come up with a personal example of a violation for each one. If you catch yourself overanalyzing a particular situation, it could mean that you are on the wrong track. Read the question in the most detached and objective way, then read the specific paragraph in the case set, go back to the answer choices and systematically eliminate each answer choice that is not relevant or that seems a bit off from the standard.

To help you prepare for the Ethics part, we created a practical table with all the categories and sub-categories covered in the Standards of Professional Conduct study session. Some of these standards can definitely appear confusing at first. To make it easier to remember and be able to relate a particular standard to a given situation, we strongly encourage you to create your own examples of simple violations of these standards. This way, you will definitely not only remember  the material better, but you will also be able to apply it on the exam and in your future career as well.


The material in this post was taken directly from our latest CFA Level 1 Study Guide. If you would like to know more about our eBook we invite you to consult our Study Guide page.

We hope you found this article useful. If you are having difficulties with specific concepts on the Level 1 exam, feel free to drop us a line at or post your question in the comments sections below.

If you have not done so already, we invite you to check out our latest eBook Study Guide specifically tailored for the December 2013 CFA Level 1 exam. With over 400 pages of fresh content, this Guide is the ideal companion to your CFA Study Toolbox.

CFA Level 1 Study Guide