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Will Goodhart, CFA UK

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Ethics becoming increasingly important to investment professionals’ careers, says CFA UK survey

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Ethics and professionalism are playing an increasingly significant role in investment professionals’ careers and influencing where they want to work, according to the latest CFA UK Ethics Survey.

Now in its sixth year, the survey highlights the challenges experienced by investment professionals, as well as the issues they consider most important.
 
Evaluating the importance of various issues when considering accepting a role at a new firm, nearly two thirds of respondents (63 per cent) awarded a score of 10/10 for the firm acting in an ethical manner in interactions with themselves and with clients, compared to 58 per cent last year. Over half (51 per cent) also awarded 10/10 for the firm demonstrating values aligned with theirs, rising from 46 per cent last year, and 44 per cent additionally attributed the same importance to the firm being forthright in disclosing and managing conflicts of interest, jumping from 34 per cent in 2017.
 
The survey also indicates that ethics continue to be core to UK investment professionals’ daily practices. Fifty-three per cent of respondents noted that they think about the CFA Institute Code of Ethics and Professional Standards regularly during the course of their work. This code is the ethical benchmark for the investment profession around the globe, regardless of job title, cultural differences, or local laws.
 
Nevertheless, there has been a shift in the elements of the Code and Standards to which investment professionals find it most difficult to adhere. Whereas in 2017 the greatest challenge for respondents was in the field of conflicts of interest (including disclosure of conflicts, priority of transactions and referral fees), this year professionalism (including knowledge of the law, independence and objectivity, misrepresentation and misconduct) has now overtaken as the primary concern, with 39 per cent of respondents finding this challenging in the past 12 months. Equally, a greater proportion of investment professionals surveyed are now finding issues related to the integrity of capital markets challenging, rising from 11 per cent to 16 per cent year-on-year.
 
According to those working in the UK industry, a gap also remains between the regard in which the investment profession is held by its clients, and how it is perceived by society more generally. Respondents awarded a weighted average score of 7/10 for clients (where 10/10 indicates the profession being held in extremely high regard) and 5/10 for society more broadly.
 
Will Goodhart (pictured), chief executive of CFA UK, says: “In last year’s survey, ahead of the implementation of MiFID II, it was not that surprising that our members were most concerned with issues around conflicts of interest. This year has seen the global stage dominated by wider discussions about professionalism and conduct and these issues have likewise drawn our members’ attention.”
 
“Our aim is to ensure that investment professionals are fully cognisant of the breadth of ethical issues and conduct themselves in line with the highest professional standard. It’s pleasing and promising that our members think about ethics regularly in the course of their work and particularly when it comes to decisions about their career path. This year’s results reflect a genuine drive from UK investment professionals to better the industry.”

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