Integrity Ethics in Professional Practice

Question 1

Describe Integrity in Business

Answer 1

Means that a person takes decisions purely because its the right thing to do

Question 2

What are the 4 aspects of ethics defined by the FCA?

Answer 2

Honesty
Reliability
Impartiality
Openness

Question 3

Describe each of the 4 aspects of ethics

Answer 3

Honesty- A person will not deliberately mislead another
Reliability- Meaning that the person can be relied upon to maintain appropriate levels of competence and skills in practice.
Impartiality - means treating different people fairly, where the people involved could be customers, or employees
Openness- Implies transparency where appropriate and where justified confidentiality is not breached.

Question 4

What is an Agency?

Answer 4

Agency is a contractual relationship where one party hires or engages another party to act on his/her behalf in transaction with a third party.

Question 5

What are the duties of the agent?

Answer 5

1. Obey Instructions- if the agent exceeds their authority they may be personally liable to the third party.
2. Exercise skill and care
3. Act in person - the duties must not be delegated to someone else.
4. Act in good faith - conflict of interests must be for the principal’s benefit.

Question 6

Give an example of an Agency relationship

Answer 6

Clients and their financial advisors.

Question 7

What are some signs of a bad Financial advisor

Answer 7

• Selects a format that makes them look good.
• Promotes shares that they or a friend has interests in.
• Tries to predict the future, how markets will perform next year.
• Flashy behaviour.