06 August 2013
What Is the Role of Financial Professionals in Shaping the Future of the Finance Industry?
Posted In: Standards, Ethics and Regulations (SER)
Mark P. Delaney, CFA, and Aaron Low, CFA, discuss how financial professionals can shape the financial services sector to be a more trustworthy, forward-thinking industry that better serves society.
2 thoughts on “What Is the Role of Financial Professionals in Shaping the Future of the Finance Industry?”
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In the retail or wealth markets, dealing with non-CFA clients (who may have $$ and be smart, but not investing sophisticates) – where can CFA advisors add value? Keeping investors focused on goals and less reactive to the markets? Sure! Minimizing costs, given their compounding negative impact (Sharpe, “The Arithmetic of Investment Expenses”) – well, perhaps not. It is important to make a profit to stay in business – and our employers want us to maximize that profit. Does that mean the CFA designation is an ethical liability? Maybe – but that may make it all the more valuable to employers. After all, “pushing risk down” is the new mantra. If the boomers start suing in 15-20 years due to “excess fees” and “self-dealing” by their advisors – well, the employer can point to the CFA (or CFP) designations and say “How shocking! That was why we hired folks with those designations – to protect our clients. We did give them sales and profit goals – but in no way did we tell them HOW to achieve them. In sum, we passed the risk down to the team / advisor level, paying a premium to get folks with knowledge and ethical standards. Bummer – we are SO disappointed!”
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