Investment industry in denial about ethics

There's a disconnect between what investment managers say about ethics and what they actually do, said Jim Ware of Focus Consulting Group in his presentation on "Ethical Leadership in the Investment Firm" to the Boston Security Analysts Society.

Investment firms ranked ethics as one of their top five values in surveys conducted by Focus Consulting. That's good. "We believe that ethics and integrity should be the spine of your organization for it to be sustainable," said Ware.

But, in practice, investment firms don't always take the high road when confronted with ethical challenges, both routine and extraordinary. In his presentation, Ware listed nine common ethical challenges that investment firms may fail. Many of them concern marketing, such as "putting the best spin on personnel changes" or "hiding the salient features of a product."

I wonder if there's an investment firm on earth that hasn't tried to spin personnel changes.

Read more about ethics in Ware's article, "Ethical Leadership in the Investment Firm."



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Susan B. Weiner, CFA
Investment Writing
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