Ethics Q

Judy Albert and Bob Tye, who recently started their own investment advisory business, plan to take the Level III CFA examination next year. Albert’s business card reads, “Judy Albert, CFA Candidate.” Tye has not put anything about the CFA on his business card. However, the firm’s promotional materials describe the CFA requirements and indicate that Tye participates in the CFA program and has completed Levels I and II. According to CFA Institute Standards of Professional Conduct: A) Tye has violated the Standards, but Albert has not. B) Albert has violated the Standards but Tye has not. C) Both Albert and Tye have violated the Standards. D) Neither Albert nor Tye has violated the Standards. I said C but the answer is apparently B - I figured that it doesn’t say anything about Tye being enrolled for the L3 exam, therefore he isn’t allowed to claim that he participates in the CFA program. ‘Intending’ to write the exam next year sounds to me as though he is not yet enrolled. Am I being too pedantic?

No designation exits for someone who has passed level 1, 2 or 3. Albert was using his candidate status as a partial designation.

And you are permitted to provide factual information about the CFA program. “describe the CFA requirements and indicate that Tye participates in the CFA program and has completed Levels I and II” is all factual so this should be permitted according to the standards

Newsuper , There was a thread on this type of question a while back, although do not remember who started it. At the time, it helped me to dissect the semantic/language point of view from what the CFAI or Schweser are asking for (i.e. knowledge of the law) and stopped me from over-complicating questions like this. The conclusion (which comes from the thread i mentioned) is to not read too much into the question when faced with something like this. You have effectively taken it one step too far and interpreted “plan” as not having enrolled as opposed to taking it on face value (plan=intend=future activity will take place). If you start analysing words in this way (what does participate actually mean? etc), you are going to spend more than 90 secs per question and will likely get the question wrong. There are other words that they throw in there from time to time such as “desire” - i.e. Mr X desires a return of 5% on top of capital preservation (does that mean he requires/needs the 5% return or would he like to receive it (but its not critical to his overall wealth situation). In summary - know which law they are testing, take words on face value and practice makes perfect. Good Luck.

Thanks for the advice JT

So for a similar question. Would it be a violation to put that you are a CFA candidate on your resume? I don’t really understand why Albert is in violation since it is just a statement of fact. He is a CFA candidate?

cpham, check page number 138 in SOPH. (exhibit 4)

Thanks, great pointer!