Ethics Question - Confusing Course of Action

Sue, 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 VI(A), Loyalty to Employer, is msot accurate? Standard IV(A): Correct Answer: A) Does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions. I chose that she is required to tell Malloy because she is entering a competitive business practice. QBank’s explanation was: 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 competititon with Malloy. It is not requried to get permission from your employer when only preparing to go into independent practice. QBank, however, in its LOS explantion states: Independent practice for compesation is allowed if a notification is provided to the emplyoer fully descriving all aspects of the services. Major contradiction and if someone can help with this matter, I will be very grateful.

Its not confusing actuallyy…only need to be read clearly… See in the QBank’s explaination the last sentence says-‘It is not requried to get permission from your employer when only “preparing” to go into independent practice.’ and the LOS explaination states that if you are actually “doing” it, as in going into independent practice, then a notification is required to the employer. Sue has to get a permission from malloy if she wants to get into independent practice, but if she had only thought of it as an idea, then there is no real need to tell malloy.

That’s great, thank you very much.