Integrity Matters is a case study-based pre-exam test for candidates for client-facing entry level qualifications, while the CFA Society of the UK has also been busy with its Annual Professionalism Report and conference alongside its ‘integrity first’ initiative.
How should these be judged? Are they bold schemes to promote the merits of financial services in the face of banking scandals – notably the Libor rate-fixing case – which have undermined investor confidence, or a waste of valuable time and money?
It depends on whether or not you think the industry has a problem with demonstrating professionalism in the first place. Certainly, it would be useful to highlight to potential clients how RDR has both raised qualification standards and lessoned the chances of being compromised by conflicts of interest.
Conflicts report
CFA UK is recommending that both potential and actual conflicts of interest could be communicated directly to clients in an annual conflict report. It’s a good idea, though few advisers will welcome the extra paperwork.
The wealth managers I speak with uphold very high standards of expertise and integrity, while many adopted RDR-ready models years ago. The real crux of the matter may well be that, strictly speaking, investment is not yet classed as a professionalism in the same way that law, accountancy or medicine are.
Will Goodhart, chief executive of CFA UK, points out that it was Benjamin Graham himself who wrote the first published piece in 1945 that said we ought to have a designation for investment professionals.
Service to society
“When he wrote that he observed that it was only 50 years since the first designations had been in use by accountants who at the end of the 19th century wanted to establish accounting as a profession and as a service to society as a whole,” he explains.
“All professions typically encourage an adherence to codes and standards of ethical and professional behaviour that reminds members to act in such a way that holds the trust of those they serve.”
I’ll be exploring the issues surrounding professionalism in greater depth in the forthcoming May edition of Portfolio Adviser, out next week.
