Lesson 3 of 6 · All lessons in this module
Lesson 3 of 6 · 13 min
Professionalism and trust in investment management
Investment management runs almost entirely on trust, because clients hand over assets and decisions they cannot easily judge, so high ethical standards are what make the business possible.
In short
- Clients entrust their assets to professionals who know more than they do about markets, products and law. That knowledge gap is why conflicts, risks and fees must be handled and fully disclosed in the client's interest.
- Unethical behaviour costs a firm twice: lower revenues (clients leave) and higher expenses (investigations, legal costs, fines). Innocent colleagues and market confidence suffer too.
- Investment management is a young profession that meets most, but not all, expectations of a profession; not every practitioner is a professional.
- The profession and investment firms must be interdependent to maintain trust.
- CFA Institute is the largest professional body. Members and candidates follow the highest of CFA Institute, regulatory and employer standards, and market integrity overrides client interests when the two conflict.
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