Employer/employee

[Isura]

An analyst belongs to a nationally recognized charitable organization, which requires dues for membership. The analyst has worked out a deal that he provides money management advice in lieu of paying dues. For this arrangement to comply with the standards, the analyst needs consent from:
A) his supervisor in the organization only.
B) both his supervisor in the organization and his regular place of work.
C) his supervisor in his regular place of work only.
D) no one since it is a volunteer organization.
Answer is B. I don’t quite get the explanation in schweser. Does he have to report to the supervisor at the charity that he also works for a fund management company? My view is that this is simply outside consulting, not employer/employee (the charity work).

 

[map1]

Is not outside consulting, he delivers “money management advice in lieu of paying dues”.

 

[newsuper]

how about this one
John Doe CFA has some private consulting clients whom he looks after for free. He takes a job at an investment management firm.
Does he need permission from his private clients? Does he need permission from the firm to look after the private clients?

 

[map1]

I guess so. The standard IV duties to employers, A loyalty states that analysts should comply with the policies and procedures employers establish to govern the employer-employee relationship, not engage in conduct that would harm the employer’s interests, not deprive employer of the advantage of their skills and abilities, abstain from independent competitive activity that could conflict with the interest of the employer. I guess both the consulting clients and the investment firm are “employers” and as such, permission to engage in consulting for either party is needed.

 

[cfaexamblogger]

Agree with map1.
answer to 1st question is B. The arrangement has to be disclosed to the supervisor in the charitable organization…don’t think there’s any doubt about that. The analyst has to inform his regular place of work about any income he is deriving from outside his employment which might be competing/similar to his job… One of the standards refers to this, can’t recall exactly which one… there’s an example with it too.
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