Ethical and professional standards

Question 1

What are the five developments in the the new regulatory framework from an ethical perspective?

Answer 1

Emphasis on the responsibilities of senior executives and accountability of individuals, including development and embedding of the firms culture and standards

New standards of conduct for senior executives, including the assessment of competence, knowledge and experience to abide by standards

Empahsis on the importance of integrity and due skill, care and dilligence

Delegation of responsibilities and oversight

Ensure the independance, integrity and effectiveness of whistleblowing procedures

Question 2

What professional standards did RDR promote?

Answer 2

firms to operate by a set of ethical standards

a committment to professional bodies

embedding the ethical culture across its business

Question 3

What are the four components of a firms ethical culture as set by the regulator?

Answer 3

Leaderships
Practices
Narratives
Capabilities

Question 4

What interventions has the regulator guided firms to consider to move towards a more ethical culture?

Answer 4

influencing the composition of management
influencing incentives for good behaviour
requiring high standards of effective risk management
influencing the training and competence regime
deterring poor behaviour

Question 5

How could an ethics framework within a firm be summarised?

Answer 5

Commitment - statement of values/code
Leadership - role played by managers
Operational - policies, procedures, toolkits
Oversight - monitoring and review

Question 6

What five key steps does leadership on ethics rely?

Answer 6

1. Understanding the language of ethics
2. Craft a clear ethical vision
3. Be good at shaping the way people make decisions
4. Remove hurdles that get in the way of making ethical decisions
5. Set an example when it comes to ehtical behaviour

Question 7

What process elements might be included within oversight and governance of ethics within a firm?

Answer 7

Governance - structure and management
Risk management - risks exposed to
Compliance - is the business conforming to standards
Internal audit - independant check of all elements

Question 8

What are the four principles that the regulator has provided to guide firms on MI, for example an ethical review of sales practices etc..?

Answer 8

Accuracy
Timely
Relevant
Consistent

Question 9

What are the six outcomes that the regulator wants firms to achieve?

Answer 9

1. consumers confident that fair treatment is central to corporate culture
2. products and services designed to meet the needs of customer groups
3. customers provided with clear information and kept informed
4. advice received is suitable and accounts for circumstances
5. products perform as expected and of an acceptable standard
6. no unreasnable post sale barriers

Question 10

What might a materiality assessment contain? Corporate Social Responsibility (CSR)

Answer 10

An assessment of a firms stakeholders, prioritised and a focus on their important issues

Question 11

What are the twelve pratical steps to complete a CSR programme?

Answer 11

1. ID stakeholders
2. Prioritise them
3. Establish key issues to them
4. Understand how issues influence your business
5. Understand where you stand on the issues
6. Estimate where your stakehodlers expect you to beon key issues and how this compares with the present
7. Understand the level of resources
8. Decide how to use resources
9. Implement and monitor
10. Communicate regularly on progress
11. Have someone check your CSR programme is working as you would expect
12. Tell people how you have improved as a result of CSR