Module 1 · Ethics & Professional Standards

Ethics and Trust in the Investment Profession

EN: Why ethics matter, ethical decision-making framework, the role of trust.
VN: Tại sao đạo đức quan trọng, khung ra quyết định, vai trò của niềm tin.

1. Why Ethics Matter Concept

About: Capital markets need TRUST. Information asymmetry between adviser and client = ethics close the gap. Long-term value aligns with ethical behavior.Tóm tắt: Thị trường vốn cần niềm tin. Bất cân xứng thông tin giữa NV và khách — đạo đức bịt khoảng cách.

Trust Capital flows depend on confidence between client and adviser.
Asymmetry Information gap means clients can't easily verify quality — ethics close that gap.
Reputation Industry reputation affects all participants.
Long-term Ethical behavior often aligns with long-term value.

2. Ethics vs Law vs Morals Concept

About: Law = minimum codified rules. Ethics = professional standards beyond law. Morals = personal values. CFA Standards often EXCEED legal requirements.Tóm tắt: Law (luật tối thiểu), ethics (chuẩn nghề > law), morals (cá nhân). CFA Standards > luật.

Law Minimum acceptable behavior — codified rules.
Ethics Often goes beyond law — professional standards.
Morals Personal values.

3. Ethical Decision-Making Framework Concept

Steps

1. Identify relevant facts, stakeholders, duties.
2. Consider relevant ethical principles.
3. Identify possible actions.
4. Consider consequences.
5. Decide and act.
6. Reflect / learn.

Practice problem Practice

Practice problem

An analyst learns from her boss: 'Recommend stock X to all clients tomorrow — we need to move our inventory.' What's the ethical concern?

Show solution

The recommendation is driven by employer's inventory, not client interest.

Violates loyalty/prudence to clients (Standard III(A)).

Conflict of interest (Standard VI).

Client interest must come before employer's; refuse and report through proper channels.