Got thrown on a mock question in which Joe Bloggs is planning to leave a company and starts solicitting clients without telling his employer. Two of the options were loyalty & loyalty prudence and care violations
What is the main difference between these two? The Loyalty disclosure is more in reference to your loyalty to an employer right? Loyalty Prudence and Care is a seperate disclosure is loyalty to clients and beneficiaries?
I would say yes to both of your questions.
Yes, essentially. Loyalty, Prudence and Care falls under Standard III, Duties to Clients. Loyalty falls under Standard IV, Duties to Employers.
Based on your description, the answer would be Loyalty (to his employer). If after obtaining clients at his new firm he allocated a high growth micro cap stock across all of his client accounts without regard for individual client suitability requirements, he would have violated the prudence and care standard.
Based on your example though, I’d say it’s kind of an unfair question without seeing the whole case.
Great, cheers 