So I am doing Q bank questions and ran into this…Can someone clarify why the first question is incorrect? Answer says that “It is not required to get permission from your employer when only preparing to go into independent practice.”, then the following question contradicts this does it not? it says “When a CFA Institute member who is presently employed by a firm undertakes ANY independent practice, he must do all of the following EXCEPT:” and one of thew options that he MUST do is secure permission from the employer. 1) Sue Parsons, CFA, works full-time as an investment advisor for the Malloy Group, an asset management firm. To help pay for her children’s college expenses, Parsons wants to engage in independent practice in which she would advise individual clients on their portfolios. She would conduct these investment activities only on weekends. Which of the following statements about Standard IV(A), Loyalty to Employer, is most accurate? Standard IV(A): A) requires Parsons to obtain written consent from both Malloy and the persons from whom she undertakes independent practice. B) requires Parsons to notify Malloy in writing about her intention to undertake an independent practice. C) does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions. Your answer: B was incorrect. The correct answer was C) does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions. Standard IV(A), Loyalty to Employer, requires that Parsons obtain written consent only from her employer before she undertakes independent practice that could result in compensation or other benefit in competition with Malloy. It is not required to get permission from your employer when only preparing to go into independent practice. 2) When a CFA Institute member who is presently employed by a firm undertakes any independent practice, he must do all of the following EXCEPT: A) disclose the expected duration of the services to be rendered. B) remand a percentage (to be determined by the employee and employer) of the income earned back to the employer. C) secure permission from the employer. Your answer: B was correct! The member is obligated to get permission from his employer if he will be in any way competing with his current employer. They must provide notification to their employer describing the types of services to be rendered, the expected duration, and compensation for the services.
The second question says “undertakes ANY independent practice” The first says preparing to undertake
omg ure right, the wording is so subtle at times, it makes sense. thanks for the post!
I think Q1’s options A and C are quite misleading when they appeared together here. This is a classic example of choosing the best option instead of the right option. Obviously option A is allowed unless it adds “under current condition” behind. Comments?