Sitting the exam in 2027? This guide follows the 2026 curriculum. For 2027 the weight falls to 10–15%, the guidance becomes one module per Standard, and GIPS leaves Level I. See what changed in 2027.
Ethical and Professional Standards is the most heavily weighted topic at Level I. It covers why trust matters in investment management, the CFA Institute Code of Ethics and the seven groups of Standards of Professional Conduct, and an introduction to the Global Investment Performance Standards (GIPS). The bulk of the material is the guidance on each Standard, with worked examples of how it applies in practice.
Almost every question is a short scenario. A portfolio manager accepts a gift, an analyst hears a rumour at dinner, a candidate describes the designation on a business card. You are asked whether a Standard was violated, which one, or what the person should have done. There are no calculations. The difficulty is in the detail: small changes in the facts, such as whether a gift came from a client or a supplier, or whether information was disclosed, can change the answer.
The Standards were revised in 2023, adding a Competence Standard, a new disclosure of services and costs under Communication with Clients, and a Conflicts Standard renamed to Avoid or Disclose Conflicts. Study from the current wording. Older notes and question banks written before the revision can give the wrong answer on these three points.
CheapMocks Academy · Ethical and Professional Standards
Study this topic in the Academy
The whole Ethical and Professional Standards reading in short lessons: the idea, the formula, worked examples and a quick self-check, with flashcards that come back just before you would forget them.
- 5 modules
- 55 lessons
- 11 video lessons
- 379 flashcards
The 5 learning modules
01 Ethics and Trust in the Investment Profession
The foundations: what ethics is, why a profession needs a code of conduct, and why trust is so important in investment management. The module explains why good people still make bad decisions, pointing to situational influences such as pressure from colleagues or large bonuses, and to a focus on short-term gain. It contrasts ethical and legal standards, which often overlap but are not the same, and sets out a simple framework for ethical decisions: identify, consider, decide and act, then reflect.
6 lessons · 1 video in the Academy02 Code of Ethics and Standards of Professional Conduct
The text of the Code of Ethics and the Standards of Professional Conduct, with background on the 2023 revisions and how CFA Institute enforces the Standards through its Professional Conduct Program. Questions test whether you know the principles in the Code, which Standard sits under which of the seven headings, and what changed in the revision. The seven headings are Professionalism, Integrity of Capital Markets, Duties to Clients, Duties to Employers, Investment Analysis, Recommendations and Actions, Conflicts of Interest, and Responsibilities as a CFA Institute Member or CFA Candidate. Knowing the structure of the Standards here makes the guidance module far easier.
5 lessons · 1 video in the Academy03 Guidance for Standards I–VII
The largest module and the source of most exam questions. For each Standard from I(A) to VII(B) it explains what the Standard requires, the recommended procedures for compliance, and a set of worked examples. You need to know the practical rules, such as following the stricter of the law and the Standards, dissociating from violations, the mosaic theory, allocating trades fairly, the order of priority for transactions, and what counts as proper reference to the CFA designation. The recommended procedures are tested too, as questions about what a firm or supervisor should do: for example setting up firewalls, blackout periods for personal trading, a written investment policy statement that is reviewed at least annually, or a record-keeping policy (at least seven years is recommended when no law or firm rule applies).
34 lessons · 8 videos in the Academy04 Introduction to the Global Investment Performance Standards (GIPS)
A short introduction to the GIPS standards: why they were created (to stop practices such as showing only the best accounts or the most flattering time period), what they aim to achieve, and who benefits. Questions focus on who can claim compliance, the rule that compliance is firm-wide and all-or-nothing, the purpose of composites, how the firm and discretion are defined, and what independent verification does and does not cover. Compliance is voluntary, and so is verification, which must be done by an independent third party and gives assurance about the firm's policies and procedures rather than about any single composite.
4 lessons in the Academy05 Ethics Application
A set of case studies that walk through each Standard again in realistic situations. The module adds no new rules. It trains you to spot the relevant facts, decide which Standard applies and choose the appropriate action, which is exactly the skill the exam tests. Expect longer scenarios in which more than one Standard could be involved.
6 lessons · 1 video in the Academy
What the questions cover
- Applying the Standards of Professional Conduct to short case scenarios
- Whether an action is a violation, and which Standard it breaks
- Material nonpublic information, the mosaic theory and market manipulation
- Duties to clients: loyalty, fair dealing, suitability, performance presentation and confidentiality
- Duties to employers, conflicts of interest, priority of transactions and referral fees
- Use of the CFA designation and conduct as a candidate
- Why the GIPS standards exist, who can claim compliance, composites and verification
Common mistakes
- Following local law when it is less strict than the Standards. Under Standard I(A), you must follow whichever is stricter, and a practice that is legal or common in a market can still be a violation.
- Assuming the Standards require you to report a colleague's violation to the regulator. The core duty is to dissociate from it, usually by going to your supervisor or compliance. Reporting to authorities is not required unless the law requires it, although it may be prudent.
- Treating fair dealing as equal treatment. Standard III(B) requires fair treatment when distributing recommendations and allocating trades. Offering different levels of service for different fees is allowed if it is disclosed and does not disadvantage other clients.
- Forgetting that any analysis based on public information plus nonmaterial nonpublic information is allowed under the mosaic theory. The violation comes from acting on information that is both material and nonpublic.
- Getting Standard VI(B) wrong in either direction. Transactions for clients and the employer must come before the member's own trades, but owning the same security as clients is not in itself a violation.
- Misusing the designation: implying a partial designation after passing a level, citing an expected completion date, or suggesting that charterholders achieve better investment results. Stating that you passed the exams in consecutive years is a fact and is allowed, as long as it is not linked to superior ability.
- Believing a firm can claim GIPS compliance for a single composite, or "except for" one requirement. Compliance is firm-wide and all-or-nothing, a consultant that does not manage assets cannot claim it, and verification covers the whole firm, not the accuracy of one performance report.
How to study it
- Read the scenario for who owes a duty to whom before looking at the options.
- Learn the Standards by number and full name. Many questions hinge on the difference between two neighbouring Standards, such as I(B) and VI(A), or III(A) and IV(A).
- When two answers both look acceptable, prefer the one that puts clients first, discloses the conflict and documents the decision.
- Answer from the Standards, not from local custom or common practice. The Standards often ask for more than the law or the market norm.
- Because the weight is high and the rules repeat across questions, ethics is one of the best places to gain marks late in your preparation. Work through many scenarios rather than rereading the text.
Try 3 Ethical and Professional Standards questions
During orientation at a wealth management firm, trainer Amara Okonkwo tells new hires that the firm's ethics programme starts from a shared understanding of what ethics is. Which description of ethics is most consistent with the CFA Program curriculum?
Ewan MacLeod, CFA, explains the CFA Institute Code of Ethics and Standards of Professional Conduct to a study group. Which statement is most accurate?
Nomvula Dlamini, CFA, is a citizen of a country with no restrictions on personal trading by investment staff. Her employer transfers her to its office in Country R, where she is registered as an investment adviser. Country R's securities regulation requires registered advisers to hold any personal equity purchase for at least 30 days. Believing that only her home country's rules apply to her, Dlamini buys shares for her own account and sells them nine days later at a profit. Did Dlamini violate the CFA Institute Standards of Professional Conduct?
Practise and prove Ethical and Professional Standards
The question bank and the mock exams are the practice half of CheapMocks Academy. Try the free sample questions, see the topic weights for the whole exam and the latest Level I pass rates.
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326 Ethical and Professional Standards questions
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Take the free mockEthical and Professional Standards FAQ
How much of the Level I exam is Ethical and Professional Standards?
Ethical and Professional Standards carries 15–20% of the Level I exam in 2026 (about 30 of the 180 questions) and 10–15% for exams from February 2027 (about 21).
Do I need to memorise the Standards word for word?
No. You need to know each Standard by number and name, what it requires and the main recommended procedures. Questions describe situations and ask you to judge them, so understanding the principle behind each Standard matters more than the exact wording.
What is the best way to study Level I Ethics?
Read the guidance for each Standard once carefully, then spend most of your time on scenario questions. After each question, check which Standard applied and why the other options were wrong. The same patterns come up again and again, and working through many examples builds the judgement the exam tests.
Why is Ethics considered harder than it looks?
The rules are intuitive, but questions often turn on a detail such as whether a disclosure was made, whether information was material, or whether the person was acting as an employee or independently. Several options may sound reasonable, and the best answer is the one that fits the Standards most closely, not the one that seems most sensible in practice.