After emailing/news flashing all clients…proceeds to call all clients from Largest to smallest. Is this a violation? I thought no since analyst cannot possible speak to all clients at the same time to get more details. The news flash was suffice. I remember taking a practice question with this from either Schweser or CFAI that was similar. Anyone agree/disagree?
he’s good
But the guy was calling clients in ORDER OF ASSET SIZE after the email…thats unfair to clients. The guy should have offered levels of service to all their clients and have the clients choose what level of service they are willing to pay for. Violation
I think they had an example of this in the text and he was good. He took care of everyone with the blast email.
good point. thought i remember somewhere that blast emails are not sufficient. Donno for sure.
he’s good. think about that can you call everyone at the same time? no. there should be a order. you can call from A to Z or from Z to A. no logic to say Z to A is more fair than A to Z ,right? or should he call from the lowest AUM? that’s crazy though. lol
My reasoning was he sent an email out to all his clients therefore made a fair attempt and can only call only so much people at one time. Also, as bigger clients pay a higher fee, this is likely outlined and commensurate in the service provided (which is also informed to clients before hand) therefore its ok. Also, the standards always focused on ‘fair’ and not ‘equal’
I do not believe this is considered a violation. Refer to the Code and Standards, example 6 (I think) under Standard III(b) Fair Dealing. If you don’t have your book, you can get this in PDF form on the CFAI website - publically available. The example concerns Jenping Weng who uses an e-mail to inform clients about a new recommedation. He then calls his three big institutional clients. This is not considered a violation “because he widely disseminated the recommendation and provided the information to all of his clients prior to discussing it with a select few. Weng’s larger clients received additional personal service that they presumably pay for through bigger fees or because they have a large amount of assets under Weng’s management. Weng would have violated Standard IIIB if he had discussed the report with a select group of clients PRIOR to distributing it to all of his clients.”
Analysts and sales guys in the industry do it all the time, call clients in order of AuM after dispersing it widely first, it’s considered a different level of service, not an unfair level. And who wouldn’t understand, given that they’re paid on commissions based on trade size…
This precise example came up on L1 and L2, either on the actual exam, or as an example in study material. No violation.
If I remember correctly, the guy sent an email with a summary for the bigger clients, then sent an email to all clients and then started calling the bigger ones, no? I considered a violation because of the summary. I thought that the summary contained relevant material that should be disclosed to all such as price target revision, etc. Different service levels are ok since everyone is able to have the higher level (ie, pay more, and receive more)
agree kblade, i remmebered this
Fairly does NOT mean equally Blast email is sufficient. The asset size was just their to throw people off who did not see the blast email, it could have said, called clients with the coolest hairstyle. conceptually and logiacally thinking, the guys with most assets probably have the “premium service” and since he already treated clients fairly with the blast email, it was not a violation to call them based on asset size. If it said the email blast went to the largest clients first and reached the lower asset class later than that would be a violation, but since it went to all clients, no violatiion