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CFA Level II Exam · Guidance for Standard IV: Duties to Employers

Leaving an Employer and Soliciting Clients: CFA Standard IV(A)

Updated 7 October 2026

Under Standard IV(A) Loyalty, you owe your employer loyalty until you actually leave. You may prepare to compete, but you may not use employer property, client lists or records, or solicit clients on employer time or with employer resources. After leaving, you may use what you recall and public information to contact clients, but not firm records.

Understand Leaving an Employer and Soliciting Clients

Standard IV(A) says members and candidates must act for the benefit of their employer and not deprive it of their skills and abilities. The duty runs for as long as you are employed. It does not end when you hand in notice.

The guidance separates preparing to leave from competing. Before you leave, you may make plans: choose a name, arrange office space, set up a firm, and tell a prospective employer. You may not solicit clients or prospects of your current firm, or use firm time, premises or resources to do it. You may not take or copy client lists, files or records, because these belong to the employer.

After you leave, the employer's property still stays behind. Client records, contact lists and files created during employment are the firm's, even if you built the relationship. You may use general skills and knowledge. You may also use what you remember, and you may contact former clients if you find them from public sources, such as a phone book or an open directory, not from the firm's records.

The employer's rules and the law can add limits. If you have a non-compete or non-solicitation agreement, the Standard does not override it.

Loyalty is not absolute. Your duty to clients and to the integrity of capital markets takes precedence over loyalty to your employer. Standard I(A) Knowledge of the Law requires you to dissociate from, or report, violations of law, and this supports reporting illegal conduct by an employer that harms clients or markets. This is not a named formal exception under IV(A), and it does not make copying records automatically permitted. Any disclosure should be limited to what is needed to report the wrongdoing, and your motive should be to protect clients or markets, not personal gain.

Do not confuse this with Standard III(E) Preservation of Confidentiality. III(E) allows disclosure of confidential client information only when it concerns illegal activity by the client. It is not the authority for reporting wrongdoing by your employer or manager.

In an item set, the facts usually show a date: before notice, after notice but still employed, or after leaving. Your answer depends on where the facts sit on that timeline and on where the information came from.

Key formulas to remember

While still employed
Prepare = allowed; solicit clients or use firm resources = not allowed
Loyalty applies until the last day of employment, including the notice period.
Client records and lists
Records created in employment belong to the employer
Do not take, copy or forward them, including electronic copies, even if you built the relationship.
After leaving
Memory + public information = allowed; firm records = not allowed
You may contact former clients found through public sources, subject to any valid agreement.
Duty to clients and markets
Duty to clients and market integrity takes precedence over loyalty; I(A) requires dissociating from or reporting employer illegality
Not a named IV(A) exception. Limit disclosure to what is needed. Motive matters: act to protect clients or markets, not for personal gain. III(E) covers only illegal activity by a client, not by the employer.
Agreements
Contract terms (non-compete, non-solicit) apply on top of the Standard
The Standard does not cancel a valid agreement. Also follow the law and your employer's rules.

How to solve Leaving an Employer and Soliciting Clients questions

Use this timeline-and-source method on any question about a departing employee.

  1. 1Find the date point: is the person before notice, in the notice period, or already gone?
  2. 2Identify the action: preparing, soliciting, copying records, or using memory.
  3. 3Identify the source of any client information: firm records or lists, own memory, or public sources.
  4. 4Check the resources used: firm time, email, premises, systems.
  5. 5Check for an agreement or law that adds limits, such as a non-solicit clause.
  6. 6Check whether the employer is breaking laws or the Code, or harming markets. If so, duty to clients and markets, together with Standard I(A) Knowledge of the Law (dissociate from or report violations), may justify limited disclosure. Standard III(E) applies only if the illegal activity is by a client.
  7. 7Pick the option that matches the Standard by name, IV(A), and state why it is a violation or not.

Quickest way: Three-question screen

When to use it: Use when time is short and the options look similar.

  1. Still employed? Soliciting clients or using firm resources is a violation. Quiet preparation is fine.
  2. Did the info or documents come from firm records? If yes, it is a violation. Memory and public sources are fine.
  3. Is the employer doing something illegal or unethical? If yes, limited disclosure to report it can be justified, but copying records is not automatically allowed.

Common mistakes in Leaving an Employer and Soliciting Clients

  • Thinking you may contact clients once you have resigned but are serving notice.

    Students treat the resignation as the end of the duty.

    Fix: The duty lasts until employment actually ends. Solicitation in the notice period is still a violation.

  • Believing a client list is yours because you built the relationships.

    Personal effort feels like ownership.

    Fix: Records and lists created in employment belong to the employer. Taking or copying them breaches IV(A).

  • Treating any preparation to leave as a violation.

    Students over-apply the loyalty rule.

    Fix: Setting up a new firm, drafting plans and finding premises are allowed if done without firm time, resources or client solicitation.

  • Saying a former client can never be contacted.

    Students confuse using records with contacting people.

    Fix: After leaving, you may contact clients found through public sources or memory, unless a valid agreement forbids it.

  • Treating loyalty as overriding everything, or treating whistleblowing as a licence to copy any records.

    Students read the duty to markets as a general override, or ignore it entirely.

    Fix: Duty to clients and market integrity takes precedence over loyalty, and Standard I(A) requires you to dissociate from or report the employer's illegal conduct. Keep disclosure limited to what is needed, and never act for personal gain.

  • Assuming the Standard overrides a signed non-solicitation agreement.

    Students think the Code is the only rule that applies.

    Fix: The agreement and the law add obligations. Follow the stricter requirement.

Worked examples

Example 1

Vignette: Meera, a portfolio manager, has resigned and works a one-month notice period. During it she emails her personal account a spreadsheet of her clients' contact details from the firm's system and tells three clients she will start a new firm next month and hopes they will follow. Questions: (1) Did she violate Standard IV(A) by emailing the spreadsheet? (2) Did she violate it by telling clients about her plans? (3) What may she do after her last day?

Show the solution
  1. Timeline: she is still employed, so the loyalty duty applies in full.
  2. Spreadsheet: client lists in the firm's system are employer property. Sending them to a personal account is taking them.
  3. Client conversations: she solicited firm clients during employment, which uses firm time and relationships and deprives the employer.
  4. After leaving: she may use what she recalls and public information, and may contact former clients that way, subject to any agreement.

Answer: (1) Yes, she violated IV(A) by taking the firm's records. (2) Yes, soliciting clients while employed is a violation. (3) She may contact former clients identified from memory or public sources, unless a valid agreement forbids it.

Example 2

Vignette: Arjun, an analyst, discovers that his manager is routinely booking trades in a way that breaches securities regulations and harms clients. Arjun gives the regulator only the trade records needed to show the breaches, then later joins a competitor. Questions: (1) Does Standard IV(A) require him to stay silent? (2) What would change the answer?

Show the solution
  1. Identify the conduct: the employer is violating laws and harming clients.
  2. Apply the Standards: loyalty under IV(A) is not absolute. Duty to clients and market integrity takes precedence over loyalty to the employer, and Standard I(A) Knowledge of the Law requires him to dissociate from or report the violations. Standard III(E) is not the authority here, because it covers only illegal activity by a client.
  3. Check scope: he limited the disclosure to what was needed to report the wrongdoing. This is not a named IV(A) exception, and copying records is not automatically permitted.
  4. Check motive: he acted to report wrongdoing, not to gain personally.
  5. Check what would change it: if he had taken records beyond what was needed, or used them to help a new employer or for personal gain, the disclosure would not be justified.

Answer: (1) No. Loyalty does not require him to conceal illegal conduct that harms clients, and his limited disclosure is consistent with the Standards. (2) It would be a violation if he took more than needed or his motive were personal gain, such as using the records to win clients for a competitor.

Exam tips

  • Mark the timeline in the vignette first. The same act can be fine after leaving and a violation before.
  • Look for the source of client information. Firm records point to a violation. Memory or public directories point to no violation.
  • Watch for words such as notice period, personal email, firm laptop, and non-compete. They signal the key fact.
  • Remember that duty to clients and markets takes precedence over loyalty, and that Standard I(A) requires dissociating from or reporting employer illegality. Check the scope and the motive.
  • Name the Standard in your reasoning: IV(A) Loyalty, sometimes with Standard I(A) if the employer's illegal conduct is involved. Use III(E) only when the illegal activity is by a client.

Leaving an Employer and Soliciting Clients: frequently asked questions

Can I take my client list when I leave a firm under the CFA Standards?

No. Client lists and records created during employment belong to the employer. Taking or copying them breaches Standard IV(A). After leaving, you may use what you remember and public information.

Can I tell clients I am leaving before my last day?

You may not solicit clients of your employer while still employed. Preparing to compete is allowed, but approaching clients to move with you is not, and nor is using firm resources for it.

Is there a whistleblowing exception to Standard IV(A)?

Not as a named formal exception. The Standards say duty to clients and the integrity of capital markets takes precedence over loyalty to your employer, and Standard I(A) requires you to dissociate from or report violations of law, including by an employer. Copying records is not automatically allowed, so limit disclosure to what is needed and act to protect clients or markets, not for personal gain.

Does a non-compete agreement change the answer?

Yes, it can add limits. The Standard does not override a valid agreement or the law, so you should follow whichever requirement is stricter.