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) precludes Parsons from entering into an independent competitive activity while still employed by Malloy. B) does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions. C) requires Parsons to notify Malloy in writing about her intention to undertake an independent practice. D) requires Parsons to obtain written consent from both Malloy and the persons from whom she undertakes independent practice.
since she only “wants” to as of right now, I believe the answer should be B.
D … My guess!!
B
A.
A or C, I’d go with A probably. I think I had read in some examples where independent practice was allowed, but realistically I don’t think any employer would allow direct competition, so I’m thinking A. Thinking again cpk, B may be possible if we consider her thought process as preparation, as prep does not require written consent. Does prep require disclosure though? I’m not too sure of the correct answer on this one.
I feel C since this could be competing with her actual job.
I think D is correct answer. Notifying her employer is not enough. She needs to obtain written consent from her current employer for her independent practice as well.
shes thinking about it… so she’s doing preparation. SHe does not need to tell her boss about it. ONly when she starts doin the practice does she need the consent
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. This is the answer. Right choice: does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions.
I thought it was D as well… cpk123 had the right idea. The correct answer was B) 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.
Preparation is before the independent practice. Does she also need written consent first before she really starts it? (although she is just preparing for it).
aaah i see. i think i’m gonna have a bad time next saturday…
wow… this was more of a Toefl question (so much emphasise on the ‘wants to engage’ phrase … a future continuous tense???)
Is this a CFAI sample question?
Schweser
niraj_a Wrote: ------------------------------------------------------- > aaah i see. i think i’m gonna have a bad time next > saturday… ^ +2
i hope schweser doesn’t differ from CFAI too much… i’d be in trouble then 
I still have problem with the answer to this question. Pertaining to SOP page 83 regarding “Independent Practice”: Although standard IV(A) does not preclude members or candidates from entering into an independent business while still employed, members and candidates who PLAN to engage in independent practice for compensation MUST provide notification to their employer describing the types of service they will render to prospective independent clients… Members and candidates should not render services UNTIL RECEIVING CONSENT FROM THEIR EMPLOYER to all of the terms of the arrangement. In this case, I will still choose D. Firstly she has to get consent from her employer as per standard IV(A). Secondly she will have to disclose to her prospective client of her employer-emplyee relationship with Malloy to avoid any conflict of interest during her advisory practice with prospective client – standard VI(A).
niraj_a Wrote: ------------------------------------------------------- > aaah i see. i think i’m gonna have a bad time next > saturday… Isnt the exam on Sunday?