Loyalty vs Additional Compensation Arrangement

Hi everyone,

May I know what is the difference between the 2? My confusion arose from the following question:

Question

Connie Fletcher, CFA, works for a small money management firm that specializes in pension accounts. Recently, a friend asked her to act as an unpaid volunteer manager for the city’s street sweep pension fund. As part of the position, the city would grant Fletcher a free parking space in front of her downtown office. Before Fletcher accepts, she should most appropriately: A. do nothing because this is a volunteer position. B. inform her current clients in writing and discuss the offer with her employer. C. disclose the details of the volunteer position to her employer and obtain written permission from her employer.

Answer

According to Standard IV(A) Loyalty, members and candidates are expected to act for the benefit of their employer and not deprive the employer of their skills. Fletcher is performing work similar to the services that her employer provides. Whether it is voluntary is not material to the need to disclose the details of the position to her employer and get written permission before accepting the position. Informing her other clients (i.e., the clients of her employer) is not normally appropriate; the issue is with her employer.

My query

Why did they quote the standard on Loyalty. Why isn’t the free parking space viewed as Additional Compensation Arrangement?

Thank you.

I hate that i’m at this point, but i recognise this question from my level 2 studies. Are you in the wrong forum?

To answer - this has nothing to do with the parking space. Connie works in the same area that she is doing additional work in, therefore it may be seen as conflicting with her time/skills at her job. She needs to get approval to do this.

Thanks for the reply. Yes, I am indeed posting this in the right forum - CFA level 3. This question was from Schweser concept checkers.

Could you please elaborate on why this has got nothing to do with the free parking space? What if the free parking space had been money instead? Would this become Additional Compensation Arrangement.