Integrity and Ethics in Professional Practice (8/80) Flashcards
What is the difference between Kant’s material and formal principles?
To act on a material principle is to act in order to satisfy a desire. For example, if you are hungry you eat something in order to fulfil that desire, or if you are thirsty you drink some water.
Formal principles, on the other hand, describe how a person acts without making reference to any
desires.
What is the Categorical Imperative?
‘Act only according to that maxim whereby you can, at the same time, will that it should become a
universal law.’
How can financial incentives for staff
potentially have a negative effect on customers?
• Checking for incentive features that are high risk because they strongly promote aggressive sales
behaviour, and ensuring they are appropriately controlled.
• Using management information to check for spikes and trends in the sales patterns of individuals to
identify areas of increased risk.
• Doing more to identify inappropriate staff behaviour in face-to-face sales conversations.
• Recognising that remuneration that is effectively 100% variable pay, based on sales, increases the
risk of mis-selling – and managing this risk.
How does CISI define professionalism?
The combination of knowledge, skills and behaviour
How can a salesman act in an open, honest and transparent way?
By being clear about all aspects of the transaction, including hsi commission. By giving you all the facts you require to make a decision.
What did the Retail Distribution Review do?
Banned provider-commision-led sales
What did the FCA’s guidance TR14/4 outline?
How financial incentives for staff could have a potentially negative effect for customers
Is culture static?
No, it;s dynamic and is shaped by the “Tone from the Top”
What is the most visible demonstration of culture?
Employee behaviour
What are two key benefits to an ethical culture?
Employee retention, and customer retention
What is one of the key drivers of employees leaving their organisation?
Chasing after a perceived better, or more ethical company culture
What is the difference bteween ethics and regulation?
You follow ethics because it is the right thing to do. You follow regulation because you have to.
What is the difference between a Code of Ethics and a Code of Conduct?
A code of ethics is aspirational, encouraging adherence to values above and beyond normal standards
A Code of Conduct sets out specific rules and guidance to be followed.
What was the latin motto of the LSE?
My word is my bond
What is an easy summary of the proper priorities for a financial services firm?
- Client First
- Firm second
- Individual third
