Ethics and Portfolio Management

Question 1

For a code of ethics to be effective, the following four elements are necessary:

Answer 1

• Senior management must support it
• Employees, at all levels, must participate
• training and reinforcement
• reviewed periodically and updated

Question 2

Three elements must be present for trust-based relationships to develop between portfolio managers and their clients

Answer 2

• Portfolio manager has specialized knowledge
• industry is well regulated
• Client before their own

Question 3

The trust relationship between a discretionary portfolio manager and their client is based on two principles:

Answer 3

competence and integrity.

Question 4

Trust is expressed by way of three constant elements in a relationship with a client

Answer 4

• Information disclosure
• Information shared has Influence over decisions
• Client must feel some kind of control

Question 5

4 patterns of Ethical Dilemma

Answer 5

• truth versus loyalty
• individual versus group
• short term versus long term
• justice versus mercy.