What do brokerage commissions represent according to the CFA Institute Standards?

Brokerage commissions, according to the CFA Institute Standards, are viewed as property of the client for their benefit. This perspective underscores the fiduciary duty that investment professionals have towards their clients, emphasizing that all funds, including commissions, are owned by the client. The client should benefit from these fees, and any arrangements regarding how commissions are handled should be transparent and in alignment with the client's best interests.

This view highlights the importance of acting in good faith towards clients and underscores the ethical obligation of financial professionals to ensure that their clients are not disadvantaged by the way commissions are structured or compensated. Therefore, when commissions are generated from transactions executed on behalf of a client, they are considered part of the client's assets, reinforcing the need for clear communication and ethical management regarding how those commissions might be used or allocated.