1
Ethical & Professional StandardsModule 1 of 5

Ethics and Trust in the Investment Profession

6

Concepts

0

Formulas

1

Decisions

3

Quiz Questions

Key Concepts

6 concepts covered in this module.

Ethics Defined

Ethics: set of shared beliefs about what is good or acceptable behavior. Goes beyond legal requirements. A code of ethics communicates an organization's values.

Trust in Investment Management

Clients entrust assets to professionals, creating an asymmetric relationship. Trust is the foundation of the investment profession.

Professionalism

Professions are distinguished by: specialized knowledge, standards of practice, a code of ethics, accountability to a governing body, and service to society.

Ethical vs Legal Standards

Ethical standards are often MORE stringent than legal standards. Legal ≠ ethical. Some actions are legal but unethical; some laws may be unjust.

Ethical Decision-Making Framework

Identify → Consider → Act → Reflect. Consider: who is affected? What are the relevant facts? What ethical principles apply? What are the alternatives?

Challenges to Ethical Conduct

Overconfidence, situational influences (loyalty, conformity, incrementalism), rationalization. Being aware of biases helps guard against ethical lapses.

Decision Frameworks

1 decision frameworks to guide your analysis.

How to resolve an ethical dilemma?

  • Apply the ethical decision-making framework systematically
  • Consider all stakeholders affected
  • Choose the action most consistent with the Code of Ethics and professional duty

Mind Map

Visual overview of how concepts connect in this module.

Ethics & Trust
Ethics
Shared beliefs
Beyond legal
Code of ethics
Values & principles
Professionalism
Specialized knowledge
Standards of practice
Accountability
Service to society
Challenges
Overconfidence
Situational influences
Rationalization
Incrementalism
Framework
Identify dilemma
Consider stakeholders
Act on principles
Reflect on outcome

Study Ethics and Trust in the Investment Profession

This module has 7 flashcards and 3 quiz questions to test your knowledge.

Open the study dashboard to access interactive flashcards, timed quizzes, and track your progress.

Open Study Dashboard

No signup required. Create an account anytime to save progress.