The Importance of Ethics for the Future of the Investment Profession, Kolkata

Indian Association of Investment Professionals

On May 31st IAIP Kolkata had an opportunity to host Alexander Flatscher, Director, CFA Codes and Standards, Asia Pacific, CFA Institute, on the Importance of Ethics for the future of Investment Profession. He began by comparing Ethics to the foundation of a building and then proceeded to demonstrate its relevance in the banking and financial services industry. He cited results of survey which indicated that even used car salesmen command a greater consumer trust as compared with professionals in the financial services industry.

He highlighted the implications of trust deficit with the following cause & effect relationship:

trust deficit

He explained that the following major factors were responsible for the unethical conduct of the people:

  • Obedience to Authority
  • Conformity to Bias
  • Self serving bias
  • Incrementalism
  • Group Thinking
  • Over confidence / optimism

In the light of recent scandals and the consequent impact on the entire asset management industry, Flatscher suggested that it…

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