Harry Peters, a CFA candidate that just passed the CFA level 3 exam, joined a financial consulting firm, ChiX Consulting, 8 months ago as the head of a new service in quantitative finance consulting. Previously Harry worked at a consulting firm were some of his duties included developing statistical models for social science research and implementing computer algorithms. After a month studying previous projects of his new employer he noticed that most projects where analysis and implementation of trading, risk and portfolio management IT systems. The managing partners ask him to acquire clients on the basis that the firm has previous experience in risk and portfolio management. More specifically he is asked to sell model review mandates in all three areas, combining his own knowledge and consulting experience with the firms experience. A) Harry cannot state that he or his firm can perform model review services since he has not acquired the relevant work experience for the CFA charter and his firm mainly performed IT services in the past. Continuing to advertise the new consulting offering would be a violation of Standard I© Misrepresentation. B) Since the combination of his knowledge and the firms experience constitutes a reasonable basis for providing quantitative finance consulting services Harry does not violate Standard I© Misrepresentation. C) ChiX may advertise the new service and ask Harry to sell review mandates. However, Harry needs to clearly communicate to clients that he does not posses significant experience in quantitative finance. Failure to inform clients of his limited financial experience would be a violation of Standard V(B) Communication with Clients and Prospective Clients. D) It is permissible for Harry to sell review mandates as long as he states that his firm possess the experience regarding model implementation, while he possess the required knowledge. Stating that he posses experience as well as knowledge would be a violation of Standard I© Misrepresentation and Standard V(B) Communication with Clients and Prospective Clients. Which one would you select? Why?
I am inclined to C
I’d say D. But I’m really going back & forth on this one.
I am biased to say B. Actually, I also hope it is so… for my own sake as this is my case coming from a quant/engineering background…
I would say D.
I would also say D
B - I can’t see the violation!
I would say D.
I’ll pick B, cuz I see no violation since his employer already has experience in analysis and implementation of trading, risk and portfolio management IT systems. He’ll be selling a combination of his experience as well as his firm’s experience. B) Since the combination of his knowledge and the firms experience constitutes a reasonable basis for providing quantitative finance consulting services Harry does not violate Standard I© Misrepresentation.
I would pick B. I have no answer key to this question as it is the result from a discussion with colleges. I feel C is exsessive, and for D, V(B) relates more to performance.
I vote B. Doesn’t seem to be a violation there
B as well. Whats the answer?
From the info provided I would say B as well. Do not see what is the violation here. However, I do not understand completely the structure of this sentence: After a month studying previous projects of his new employer he noticed that most projects where analysis and implementation of trading, risk and portfolio management IT systems. IMO the predicate, describing the status/action of the subject MOST PROJECTS is missing here? English is not my native language but I’s goof enough to get 8 of 9 in IELTS last year.
seems to be B for me. A is out cause CFA charter even if he had it for a longer period does not mean he has quant exp. C is out, as am not sure you can advertise a service and then say you know what I dont have a lot of experience. D is out, If you are working for the firm and have knowlegde in something, you dont need to say I have knowledge but my firm doesn’t.