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CFA Level I · CFA Level I Exam · Code of Ethics and Standards of Professional Conduct

Standard IV(A) Loyalty requires members and candidates to act for the benefit of their employer. An analyst is preparing to leave her firm to start a competing advisory business. Before her last day, which action is most appropriate?

She should prepare her business plan on her own time, without firm resources or client information. Standard IV(A) allows planning a competing venture while employed, but taking the client list or soliciting the firm's clients before leaving would breach her duty of loyalty to the employer.

  1. ACopy the firm's client list to use when contacting clients after she leaves
  2. BSolicit the firm's clients during working hours so they are ready to move on her departure
  3. CPrepare her own business plan and materials on her own time without using firm resources or client informationCorrect

Explanation

Under Standard IV(A), an employee may plan a competing business as long as she does not breach her duty of loyalty. Preparing materials on her own time without employer resources or confidential client information is permitted. Copying the client list or soliciting clients while still employed is a breach.

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