Michel Marchant, CFA, recently became an independent money manager. After six months, he has only ten clients, who are family and friends. To supplement his income, Marchant accepted part-time employment as an advisor at Middleton Financial Advisors. According to CFA Institute Standards of Professional Conduct, which of the following statements about Marchant’s duty to his new employer is CORRECT? Long story short, you need to tell Middleton, but do you need to tell your existing clients?
Yes I think so. Is this schweser question? Can you post the official answer?
No not unless it’s changed the investment process for these exisiting clients…
do they give reasons? I would think 1) additional compensation, so everyone needs to know 2) conflicts of interest, might take up his time managing current accounts, so DEFINITELY needs to let his existing clients know this is not working part time at home depot on wknds??
You need consent from all parties to enter into independent practice and to receive additional compensation, so the answer is yes according to two standards. Duties to Employer - Loyalty Duties to Employer - Additional compensation.
allépourpêcher Wrote: ------------------------------------------------------- > No not unless it’s changed the investment process > for these exisiting clients… Changing to Yes. Because you could look at this and say it might conflict with dutues to existing clients, even if it wouldn’t.
I’ll go with my rule of thumb (Heuristic) and say… “When in doubt… Disclose that sh!t”
c’mon iregula!!!..give us the answer??
Thats my take As an independent money manager- his only duty is to his clients. Unless there is a conflict of interest that would impair his independence and objectivity, he should disclose it to existing clients. On the other hand, he should disclose all additional compensation to Middleton and receives consent before pursuing independent practice.
the answer is yes, you need to disclose to both
the question is “which of the following statements about Marchant’s duty to his new employer…” Doesnt even ask anything about existing clients (which I misread) The main point is does part time employment result in any duty to employer, especially if you are already in the same business…i think the answer is yes.
Iregular- can you please provide the full answer if possible.