Just curious, any method mentioned by CFA can justify the third-party research is sound?
If the manager purely think the research report recommendation makes senses, does it satisfy the requirement? (I guess it’s the most common scenario)
Curriculum V1. P.132 Example 6 (Reliance on Third-Party Research ):
Gary McDermott runs a two-person investment management firm. McDermott’s firm subscribes to a service from a large investment research firm that provides research reports. McDermott’s firm makes investment recommendations on the basis of these reports.
Comment: Members and candidates can rely on third-party research but _ must make reasonable and diligent efforts to determine that such research is sound. _ If McDermott undertakes due diligence efforts on a regular basis to ensure that the research produced by the large firm is objective and reasonably based, McDermott can rely on that research when making investment recommendations to clients.