Ethical Standards

Ethics Topics by CFA

Among the topics on ethics being discussed by CFA Institute, is Ethical Decision-making for investment professionals. The framework provided by the CFA in making ethical decisions by investment professionals is Identify, Consider, Act, and Reflect. This framework is developed with a purpose of assisting professionals to analyze and evaluate ethical situations where there is not a clear set-out path for right and wrong path (CFA Institute, 2018). CFA indicates that the framework is not a checklist but rather a summary of the main elements of the process of making ethical decisions. The framework may be applied in different situations involving ethical decisions encountered on a daily basis. 

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The first step of the framework is Identity.  Under this framework, the investment professionals are expected to recognize the fundamental ethical principles such as fair dealing, full disclosure, and loyalty towards others. It is also important to understand to whom a duty of care is owed, and highlight any conflict of interest. The next step is Consider; where one is required to evaluate any situational influences such outside pressure or internal biases, which may affect the decision. The third step is Act; where one is expected to decide on a given situation. The final step is on Reflect; here one is expected to review the lessons learned from the lessons learned (CFA Institute, 2018). 

One of the pages on the CFP Board on ethics is an advertisement by the CFP Board in the wall street journal that had been made in the 22 December  2017 edition. This advert included comments by the renowned consumer groups that support the CFP endeavors in advancing high standards that may be beneficial to the public. Among the top reviews is one by AARP that highlights how the CFP Board has been a pioneer in developing and promoting professional, competent, and ethical financial planning services. AARP indicated its support for the plan by CFP to broaden the fiduciary standards for CFP professionals. A major proposed change is a call for the professionals to put the client’s best interest ahead at all times (CFP Board, 2017). Another page in the CFP website is a review making a side-by-side comparison of the proposed changes to the standards of professional conduct to the current standards. Here, the CFP reveals that the revision to the standards is meant to enhance the integrity and value of the CFRP professional to the stakeholders that they serve. Among the changes identified in the proposed revisions is the requirement for professionals to put the interest of their clients at the forefront. The revisions also highlight the updated standards related to financial planning (CFP Board, 2017).  

Among the people known to have been convicted for the violation of ethical standards is Michael Milken. He was referred to as the ‘Junk Bond King” and was most famous for initiating the trading of the lowly rated corporate junk debt. He was accused of using deep inside knowledge about debt that was used to facilitate the corporate takeover deals in making his moves on stocks of the related companies. He pleaded guilty in 1990 to six felonies and agreed to pay fines valued at $ 600 million and $ 200 million to settle fraud case. The junk board markers that Milken dealt with provided a source of funding for organizations that would have been rejected by commercial banks. On the other hand, they also funded financial buccaneers in their frenzied corporate takeovers (Zey, 2017).


CFA Institute. (2018). Ethical Decision-Making for Investment Professionals. Retrieved from

CFP Board. (2017, July 26). Announcements; Review a Side-by-Side Comparison of the Proposed Revisions to the Standards of Professional Conduct to the Current Standards. Retrieved from

CFP Board. (2017). CFP Board Advertisement in the Wall Street Journal. Retrieved from, M. (2017). Banking on fraud: Drexel, junk bonds, and buyouts. Routledge.

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