That I didn’t get… Which of the following statements is most correct under the Code and Standards? A) CFA Institute members are prohibited from undertaking independent practice in competition with their employer. B) Consent from the employer is necessary to permit independent practice that could result in compensation or other benefits in competition with the member’s employer. C) Written consent from the outside prospective client is necessary to permit independent practice that could result in compensation or other benefits in competition with the member’s employer. D) Members are prohibited from making arrangements or preparations to go into competitive business before terminating their relationship with their employer.
have not gone into ethics yet, but I would say A or B… Would go for A. What is the right one?
I would say either B or C and it definitely has to be “written consent”. I would go for C.
B
Schweser says “B” I picked “C”, but don’t we need written consent from “all parties” before starting consulting ?
We do need written consent from both employer and client, but maybe the logic is that employer’s permission is more important? I.e. client is less likely to object (than employer) if you undertake independent practice in competition with your employer.
mo34, where is that question from?
B is the correct answer. A is not correct since member is allowed to take outside independent practice even if it is direct competition with your current employer as long as you have consent. C is not correct. You need consent from your current client, not prospective client. D is not correct. You are allowed to make arrangement for your new up-coming business while you are still employed in your current firm. However, you should only do this on your own time. Lunch hour, afterwork
WS, regarding C - don’t you need consent from the client you will be working with?
In discussion of Independent Practice (Standard IVA), you “should not render services until receiving consent from the employer” - it does not say anything about “writtent consent” here. When it comes to compensation - it has to be written consent from all parties involved before accepting gifts, benefits, compensation (Standard IVB).
ws Wrote: ------------------------------------------------------- > B is the correct answer. > > A is not correct since member is allowed to take > outside independent practice even if it is direct > competition with your current employer as long as > you have consent. > > C is not correct. You need consent from your > current client, not prospective client. > > D is not correct. You are allowed to make > arrangement for your new up-coming business while > you are still employed in your current firm. > However, you should only do this on your own time. > Lunch hour, afterwork Ws, you need written consent from the prospective client. I am 100% sure. It’s a QBank question. I am sure the answer is written consent from both, it’s just one of those crappy Qbank questions.
My understanding is need to take written permission from current employer as well as for whom the member is likely to provide consultation for. Permission in this case from the clients are not required unless there is any conflict of interest.
tanyusha Wrote: ------------------------------------------------------- > In discussion of Independent Practice (Standard > IVA), you “should not render services until > receiving consent from the employer” - it does not > say anything about “writtent consent” here. When > it comes to compensation - it has to be written > consent from all parties involved before accepting > gifts, benefits, compensation (Standard IVB). My understanding is “independent practice” while you are employed is a form of extra compensation (consulting fees) .
I’m with WS I picked B as the correct answer as you need consent from your employer, not prospective clients. You don’t need permission from a prosective client if your compensation might be competing with yoru current employer. That competition is why you need consent from your current employer.
The question is which is “most correct”. You would get in sooo much trouble undertaking an independent practice in competition with your current employer without getting their permission signed in blood in front of a Supreme Court justice…
This is the exact wording of Standard 4-B: (Shw. Page 52) Members and Candidates must not accept gifts, benefits, compensation, or consideration that competes with, or might reasonably be expected to create conflict of interest with, their employer’s interest unless they obtain WRITTEN consent from ALL PARTIES involved. I added the caps.
isn’t the standard you just quoted referring to independent judgement or something like that, not duty to employers as the question you posted refers to?
mo34 Wrote: ------------------------------------------------------- > Ws, > > you need written consent from the prospective > client. I am 100% sure. > how do you get written consent from a client that is not a client yet?? If you are 100% sure, I am listening. I also saw the quote from CFAI, ALL PARTIES mean who exactly?
If the quote does not make you 100% sure that you need written consent from employer and client, nothing will 
WS- i’m with you… Mo34 - you haven’t answered what i’m curious about: isn’t the standard you just quoted referring to independent judgement or something like that, not duty to employers as the question you posted refers to?