Ethics in the Financial Services Industry

What is ethics? Ethics is two things. First, ethics refers to well based standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethical standards also include…virtues of honesty, compassion, and loyalty. Secondly, Ethics also refers to the continuous effort of studying our own moral beliefs and our moral conduct, and striving to ensure that we, and the institutions we help to shape, live up to standards that are reasonable and solidly-based. Source: Issues in Ethics IIE V1 N1 

 

Regulation versus Ethics
Financial Services Professionals job and mission is to enable clients to grow and protect their wealth. This means trillions of dollars of assets are involved. For this reason, the Financial Services industry is also highly regulated. Regulation minimizes fraud, theft and misuse. Ethics purifies the industry. Ethics set the standards of excellence for professionals in financial services. It is the moral rudder that holds us steady to our course. Ethics in the financial services industry affect everyone…even consumers. If you are not a Financial Services Professional, you’re a consumer of Financial Services.

Financial Services Professionals can usually anchor themselves to their company(ies) Code of Ethics. Also Financial Services Industry Associations have “industrial strength” code of ethics that involves a process for validating competency in ethics at least once every two years.