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

A member is offered a part-time consultancy that would not compete with his employer but might limit the time he can devote to his duties. Under Standard VI(A), which course is most appropriate?

He should avoid the conflict, or if he does not avoid it, report it to his employer. Standard VI(A) guidance says conflicts that could prevent clear judgment or full commitment to his duties should be avoided, and unavoided ones must be reported, whether or not the other firm competes.

  1. AAccept it and report only if his performance declines
  2. BAvoid the conflict, or if he does not avoid it, report it to his employerCorrect
  3. CAccept it because the firm does not compete with his employer

Explanation

The guidance says any potential conflict that could prevent clear judgment about or full commitment to duties to the employer should be avoided, and if not avoided it must be reported to the employer. Lack of competition is not the test, and waiting for performance to decline is not prompt reporting.

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