What are my duties to my employer under Standard IV? Can I prepare to leave for a competitor?

Standard IV addresses the sometimes-conflicting obligations between your duties to clients, your employer, and your own interests.

Standard IV(A) — Loyalty: You owe your employer loyalty and must not harm their interests. However, this is NOT absolute loyalty — your duty to clients comes first under Standard III.

Key rules on leaving:

• You CAN prepare to leave (update resume, interview) while still employed
• You CANNOT solicit your employer's clients before you leave
• You CANNOT take proprietary information, client lists, or trade secrets
• You CANNOT misappropriate your employer's work product

The tricky scenarios:

Action	Before Resignation	After Resignation
Update resume	Allowed	N/A
Interview at competitors	Allowed	N/A
Solicit firm's clients	NOT allowed	Allowed (unless non-compete)
Copy client lists	NOT allowed	NOT allowed
Use models you built at firm	Depends on employment agreement	Depends
Start competing business	NOT allowed while employed	Allowed

Standard IV(B) — Additional Compensation Arrangements: You must not accept gifts, benefits, or compensation from third parties that create a conflict with your employer's interest UNLESS you disclose them to your employer and receive written consent.

Example: Marcus receives an offer from a grateful client to pay him a $10,000 bonus directly. Marcus must disclose this to his employer and get written permission before accepting.

Standard IV(C) — Responsibilities of Supervisors: Supervisors must establish reasonable compliance procedures and make reasonable efforts to detect and prevent violations by those under their authority.

• If a subordinate violates, the supervisor is liable if they failed to supervise adequately
• Having compliance procedures in writing is necessary but not sufficient — you must also enforce them

Exam tip: The CFA exam frequently tests the leaving-an-employer scenario. Remember: you can prepare but cannot compete or solicit while still employed. The moment you resign, solicitation becomes permissible (absent contractual restrictions).

Explore our CFA Level I Ethics course for more employer duty scenarios.