According to Standard VI(C) - Referral Fees, what is a stated purpose of disclosure?

• A. Disclosure means advising a prospective client about the referral arrangement once a formal client relationship has been established.
• B. Disclosure will allow the client to request discounted service fees.
• C. Disclosure will help the client evaluate any possible partiality shown in the recommendation of services.
• D. Disclosure ensures the client pays higher fees.

Answer: (C)

Transparency about any referral arrangement is essential because it lets the client judge whether the recommendation could be biased by compensation. The purpose of disclosure under this standard is to help the client evaluate any possible partiality in the recommended services, so the client can make an informed decision.

Other statements miss the point: disclosure should occur before or at the time of the referral, not after entering a relationship; and the aim is not to push discounts or higher fees.