ETHICAL AND PROFESSIONAL STANDARDS

Question 1

Ethics

Answer 1

A set of shared beliefs about what is good or acceptable behaviour and what is bad or unacceptable behaviour.

Question 2

Code of ethics

Answer 2

A written set of moral principles that can guide behaviour by describing what is considered acceptable behaviour.

Question 3

Profession

Answer 3

A group of people with a specialised skill set and knowledge who serve others and agree to behave in accordance with a code of ethics.

Question 4

Characteristics that a profession may have ?

Answer 4

1) A code of standards for professional behaviour

2) A regulatory body which enforces rules and monitors ethical behaviour of members

3) A focus on the needs of their clients

4) A focus on a service to society

5) A requirement to put client interests first

6) A focus on or requirement of continuing education

Question 5

Ways professions establish trust ?

Question 6

Suitability standard

Answer 6

A standard which refers to the need to match between client return requirements and risk tolerances and the characteristics of the securities recommended.

Question 7

Fiduciary standards

Answer 7

A standard which requires professionals to use their knowledge and expertise to act in the best interests of the client.

Question 8

Ethical decision-making framework from CFA Level 1 curriculum.

Answer 8

1) Identify: relevant facts, stakeholders and duties owed, ethical principles, conflicts of interest

2) Consider: situational influences, additional guidance, alternative actions

3) Decide and act

4) Reflect: Was the outcome anticipated? Why or why not?