Apologize for the length of the following copies of email, but I wish it could give you a fair bit of taste on how (I assume) Ethic Helpdesk works. The first email is my original enquire _______________________________________________________________________ Dear Sir/Madam, My name is Fei, a current candidate for the coming level 3 exam. The following are what I’ve found problematic or at least confusing from session 1 and 2 in CFAI’s curriculum. I hope can take this opportunity to seek your clarification. Thanks in advance for your elaboration. All the pages are referred to CFAI materials. 1, page 36 example 4. Misconduct is defined as action reflects adversely on their professional reputation, integrity, and competence. Though CFAI seems keen on using examples such as ‘arrested in demonstration parade’ etc which means to differentiate professional activities from involvement in personal activities, the content in page 35 explicitly states ‘any act that involves lying, cheating, stealing, or other dishonest conduct that reflects adversely on a member’s or candidate’s professional activities, would violate this standard’. Now back to this example, the ‘environmental activist’ is the classic part and no conclusion of misconduct can be identified. However, trespassing of property of private institution is simply a breach of civil law under most legislation in the world and should be understood as guilty. To more serious extend, how can you expect the integrity from a professional by seeing such ignorance of law, despite her motivation or intention might be good? And if I may stretch the topic a little bit, as question 36 on page 122 derives, that an illegal action may be ethical and an action that is legal maybe unethical. If so, will that take control in this circumstances so the client can expect Carman to behold with his ‘financial’ profession integrity instead of finding her violation? Since the comment from CFAI doesn’t explicitly conclude violation or not, your opinion is appreciated. 2, page 58 to 59, example 2. I wish to seek further clarification regarding on concept of ‘different level of service’, that in this case, if hypothetically the fact of discretionary accounting is charged with higher fees are disclosed and obtained consent from client, will the be qualified as ‘different level of service’? If so, will this reversed the fact that such product is unfair? Or the fact of disclosure and client consent overruled unfairness? 3, page 67, middle part. This is by far the most ridiculous and confusing part I’ve found so far. Members much keep information about client confidential unless 1, information concerns illegal activities 2, disclosure is required by law 3, with permission However, what wrote black on white is ‘Similarly, if applicable law requires members and candidates to maintain confidentiality, even if the information concerns illegal activities on the part of the client, members and candidates should not disclose such information’. What it basically says, from my understanding that some sort of local law ruled out Standard III.E. immediately, and also ruled out Standard I.A. for ‘always apply striker one, being Code and Standard, local law, or applicable law’. 4, page 106 bottom right Would you please advise that what is the practical reason behind the difference by stating ‘I have passed all three levels of the CFA Program and may be eligible for the CFA charter upon completion of the required work experience.’ And ‘I expect to pass level 3 exam in CFA Program in 2009, subject to result.’ As mentioned on page 105 middle part, ‘CFA candidates must never……….cite an expected completion date of any level of the CFA Program’. Your opinion is greatly appreciated. Regards, Fei _____________________________________________________________________ Then the reply ______________________________________________________________________ Thank you for your inquiry, which was forwarded to me for response. With over 140,000 candidates, CFA Institute cannot provide individual coaching or tutoring to candidates. The CFA Program is designed for independent self-study. If you find something in the curriculum that you think is in error (typographical or calculation error), the error can then be investigated and, if needed, a correction can be included in the Errata list found online. However, we cannot tell you how to interpret specific readings or advise you on how to answer exam questions. The examples and comments in the “Guidance” readings are meant to provide examples of what may or may not be considered violations. They are not all-inclusive and do not provide an exhaustive list of all possible violations – they are merely examples. I hope this helps. Regards, Wanda Lauziere CFA Institute ______________________________________________________________________ My further enquire below ________________________________________________________________________ Thanks for your attention. May I first being confirmed if this is from Ethic Helpdesk as Professional Conduct Program advised me previously? Though my enquire is arise from materials published by CFAI, I hope it is understood that my initiation is not simply seeking for ‘coaching or tutoring’ for the purpose of passing exam, rather, I wish to seek official clarification and guideline on issues I encountered to be confusing in the content of the Code and Standard. Being a member or candidate, it is my understanding that the Code and Standard is the core component in CFAI and deserves to be carefully addressed. Your further comments are appreciated. Regards, Fei _______________________________________________________________________ The following is comment from my studymate, credit to Ganesh _______________________________________________________________________ perhaps you could write to this Wanda and remind her that ehics etc etc are tested in the PM session where a definite answwer must be provided. -ie this is not about individual tutoring but clearing up an ambiguity that she hersfelf has now admitted to by saying: However, we cannot tell you how to interpret specific readings or advise you on how to answer exam questions. The examples and comments in the “Guidance” readings are meant to provide examples of what may or may not be considered violations. They are not all-inclusive and do not provide an exhaustive list of all possible violations – they are merely examples She cannot say-we cannot tell you how to interpret specific readings-and then say-readings are merely examples.
WTF? Her job isn’t to help you understand the code well enough to pass. Her job is to help people not run afoul of the code and lose their charters. I think here response was appropriate and spot on. Your question isn’t even polite enough to be answered wiithout Wanda digging up some copy of the CFAI study materials (which she surely does not have at hand). If you want to discuss something like this, post the question on AF not waste the time of someone trying to keep charterholders out of trouble.
JoeyDVivre : Is Wanza your girlfriend? Why are you so forcefull in defending her? There are some confusion in the way CFAI present the materiels. We need more consistency. Don’t you think?
Hi Joey, Though your attention is appreciated, I failed to see the need to start a post with word like that. Please be advised, in case if it’s missed from the post, that my original enquire is not address to Wanza but PCP. I was acknowledged the enquire should be forwarded to Ethic Helpdesk, even I am not sure it is where Wanza comes from at the moment. That being said, as mentioned in my reply email I don’t think there should be any difference for a chartholder or candidate to seek for interpration from Ethic Helpdesk, for the sake of understanding or ‘keep their charterholder’. I’m now under impression the area of my confusion has already came to your consideration perhaps in previous events, and your constructive opinions are appreciated. ________________________________________________________________________ Hi Tibwa, Thanks for your word of ‘consistency’, that is exactly where I found the contridition come from, especially in regard to my question 3 for Standard III(E). Thanks. Fei
WTF? All of those cases above make perfect sense if one applies a basic understanding of the English language. Like Joey said, if you have a question about the wording of various Code of Standards examples you could post it here and people (on any level 1-3 since ethics is repeated on each exam) would be glad to help you. It is obvious from your email that you are a candidate trying to figure out how you might answer exam questions, and not a professional trying to apply the CFAI code of standards to any real world situation. Ethics is not a clear cut topic, and there are very thin lines that make the difference something between a violation or not being a violation. Like the CFAI rep said, it is not their job to coach you though every topic that you don’t understand… you need to figure it out like everone else does. The anger and disbelief regarding CFAI’s response is ridiculous.
Hi McLoed81, Yes I am a candidate and I have no problem about that. English is not my native language and I have no problem about that neither. I am not even working in financial industry, and I admit I have no actual working experinces to imply Code and Standard into practice. So perhaps you’d like to enlighten me with your insights, and any constructive opinion is apprecaited. But if you want to move this discussion to personal level, please ignore this post. Fei
OK… Since you asked so nicely. P. 36 Q4: ‘Carmen Garcia’ has the right to conduct non-violent protests as an environmental activist. Trespassing is a trivial, misdemeanor offense and has nothing to do with Carmen’s professional activities. These activities do not reflect poorly on her profession as a socially responsible mutual fund manager. No violation. P. 58 Q2: This is a violation because (1) the preferential treatment given to the commingled fund was not offered to the pension fund accounts. The 5% stake in the commingled fund that is offered to pension participants still does not bring things to an equal level. (2) The practice of allocating all IPO shares and giving preferential treatment was not disclosed to pension plan participants. There is no tiered service structure that is offered to the clients here. In order for these different levels of service to be acceptable, the various service levels would have to be offered to all clients and the differences between those levels of service need to be thoroughly disclosed from the onset of these relationships. P. 67 Middle Part: This is pretty clear. You have to follow the law of the land, or if that law is less strict than CFAI standards, follow the CFAI standards. The legality of what you do and don’t need to report in certain situations is a matter for lawyers and compliance to decide and not financial analysts. This is why the text states that when in doubt, member/candidates should consult with their legal/compliance personnel. If the law specifically states that it is would be illegal for you to to disclose some specific ‘illegal’ activity conducted by a client, than THAT would be the ‘more strict’ rule (requiring you to maintain confidentiality). Again, CFAI is not in the business of teaching law and that’s why the text says to talk to legal / compliance when in doubt. P. 106 Bottom Right: ‘I have passed all three levels of the CFA Program and may be eligible for the CFA charter upon completion of the required work experience.’ -This is a clear statement of FACT and is can be stated with absolute 100% certainty. Also, this isn’t making any claim of superiority. ‘I expect to pass level 3 exam in CFA Program in 2009, subject to result.’ -Like you said, a candidate can not cite any expected completion date or expected results. Statistically speaking, the majority of candidates who expect to pass on date x/y/z fail on date x/y/z. I’m not sure where the confusion is for this one. Now please stop bothering the CFAI staff so that they can get back to evaluating my work experience. Thanks.
Pennyyf… It really sounds like you are mis-interpreting the point of the ethics section. Many of us come from a variety of educational and professional backgrounds. Perhaps you have had limited experience with an area, such as Ethics, that requires independent judgment and critical qualitative thinking. In a typical Western liberal arts student, these things are taken for granted. If this is your first introduction to a topic such as western ethical thinking, then I can certainly understand your confusion. I also envy your position as someone who is just beginning to experience this deeply rewarding topic of thought. You seem to be searching for hard and fast answers (“brightline rules” would be a term of art that a compliance officer might use to describe what you seek). Often, there are none. The fact that there are not necessarily any hard and fast rules in certain areas is part of what makes this “Ethics” and not “Law”. The proper application of an ethical code in every conceivable circumstance is not something that can be explicitly taught. Reading 3 of this year’s Level III curriculum has an excellent reading that makes this point quite eloquently: “Even with a code of ethics and a set of professional standards written specifically to guide investment analysts, there aren’t cookbook solutions for many concrete ethical problems. It takes training to recognize when there are ethical as opposed to “merely” technical matters to be addressed, and it takes practice to discern the principles and values at stake, to formulate the alternatives, and to decide up on the most suitable course of action in a particular situation.” Writing specifically about the standard of reasonable care analysts must apply to investment recommendations (but applicable in more general terms, as well, I believe), the author also notes (page 139): …that the compulsion to act with “reasonable judgment … is itself a matter of judgment. This is not an impasse, but it is a challenge. Judgment is acquired with education and experience (and education may be seen as a means of gaining experience more systematically and rapidly than personally witnessing events would permit). the “reasonable judgment” required by the Code and Standards is the practical wisdom displayed by mature experts, competent investment professionals qualified by training and practice not only to identify relevant factors, but also to evaluate their significance and to weigh their relative importance.” I hope this helped.
I have a background where the issues above come up regularly. The issues with standards as I see it are listed below. These issues may be aadressed subjectively where the response allows for discussion-as many here have shown. However-where the response reqiured is a single answer from a choice of 3-certainity is required. The issues: RE: Standards of Professional Conduct 1(D) –Professionalism –Misconduct- page 36 example 4. I think it should be made clear that ANY breach of the law (barring misdemeanours eg parking fines, speeding tickets) that leads to a conviction should be considered Misconduct . The example of a an environmental activist-Example 4, pages 36 , Volume 1, is to my mind an illustration of that often used phrase: "One man’s terrorist is another man’s freedom fighter. RE: Question 36-pg 122 Statement 1:- An illegal action is unethical , and actions that are legal are ethically sound. CFAI says the “correct” answer is B-and in the reasons for the answer (Appendix A, A-8) states: “What is legal is not necessarily ethical.” This answer is , to put it bluntly –crap. This is the kind of question you get in legal philosophy classes-and I can state categorically that the issue is still being debated. This is clear example of CFAI trying to find a definite answer that would fit its multiple choice questions-despite the question being one to which no clear answer is possible. Indeed this certainty seems to contradict another statement by the CFAI about which it is equally certain: See page 67-Standard III(E) Duties to Clients; Preservation of Confidentiality ; in the commentary: As a general matter, members and candidates must comply with applicable laws……if applicable law requires members and candidates to maintain confidentiality , EVEN IF THE INFORMATION CONCERNS ILLEGAL ACTIVITIES ON THE PART OF THE CLIENT ,MEMBERS AND CANDIDATES SHOULD NOT DISCLOSE SUCH INFORMATION. As mentioned-we are required to sit an exam and provide “The Best” answer from a range of choices. Here is another case where the requirement is impossible. And let’s not forget that even if the % of questions of Ethics is not large –it can determine whether those on the borderline –ie those of you who found yourselves in Band 10-or perhaps even 8 or 9-are allowed to pass.
Thanks for everyone’s attention and advises. As said, my biggest concern is the seemingly (to me at least) contravention between different jurisdictions when it comes appliable law and confidentiality. I will try to find the legitimate definition of ‘more strict’ and share the responses back to here.
WTF is actually 3 words unless your objecting to the word “The”. The thats the case I’m not sure why? on an unrelated and equally obnoxious note did you know that the following sentance is gramatically correct: Buffalo buffalo Buffalo buffalo buffalo buffalo Buffalo buffalo.
…so is “john, where Terry had had had had had had had had had had had the correct answer,” if you punctuate it properly.
Umm no, now your just bein silly, why would you think so? However Buffalo buffalo Buffalo buffalo buffalo buffalo Buffalo buffalo is gramatically correct as in: Buffalo(city) buffalo(animal) Buffalo(city) buffalo(animal) buffalo(verb) buffalo(verb) Buffalo(city) buffalo(animal). = "Buffalo buffalo (subject) [which the] Buffalo buffalo (Indirect object) buffalo [verb] buffalo [another verb] Buffalo buffalo [Direct Object]. [Noun], (which the) [Noun verb] [verb] [noun]. = In other words, bison from Buffalo that (other) bison from Buffalo intimidate, in turn intimidate bison from Buffalo that (other) bison from Buffalo intimidate. In this case the subject and object of the central verb are “balanced” at five words apiece. soucred from wikipedia.org Mandelbrot Wrote: ------------------------------------------------------- > …so is “john, where Terry had had had had had > had had had had had had the correct answer,” if > you punctuate it properly.