Turn principles into practice
Why ethics is foundational to the profession.
Trust underpins the proper functioning of financial markets, and that trust depends on individuals making ethical decisions day-in, day-out. CFA Institute’s guidance helps professionals like you get those decisions right.
Why ethics is foundational to the investment profession
In the investment industry, ethical practice must be more than a few well-chosen words, it's fundamental to why the profession exists. From its founding in 1947, CFA Institute has seen like-minded investment professionals band together to raise the standards of working practice and, crucially, establish a credential that signals a clear commitment to ethical conduct.
Today, setting strong standards of ethical behavior and upholding trust in the profession remains central to CFA Institute, helping CFA charterholders stand out in a crowded market amid unprecedented disruption.
Ethics underpins everything we do, providing the foundation for how investment decisions are made and how professionals engage with clients and markets. By setting ethical standards, shaping best practice, and engaging the profession through research, advocacy, and our global standards, we help ensure those principles are applied consistently.
Applying ethics in a changing financial landscape
As the investment industry finds itself on the cusp of major change, demand for the highest levels of integrity and trust in the profession has never been greater.
Geopolitical instability, the risks and opportunities around climate transition, plus the growing importance of private capital markets to global finance, has created the need for new skills and new contexts in which to understand what the right ethical-based decisions should be. Meanwhile, growing use of Artificial Intelligence (AI) is raising fundamental questions about the role of professionals in the investment process.
“AI is reshaping the context in which investment decisions are made, challenging how we apply established theories and frameworks in an environment of automated portfolio construction and real-time information. It raises important questions not just about the future structure of the industry, but about judgment, responsibility, and accountability in decision-making. Time and again, the answer comes back to ethics as the anchor for navigating this change,” Naqvi says.
But this is not about ticking an ethical compliance box, Naqvi says. “It’s about addressing information asymmetries with integrity. Not every client will understand the nuances of a complex investment strategy, so they rely on professionals to communicate risks and performance clearly, fairly, and transparently.”
For CFA charterholders, safeguarding the integrity of capital markets and improving investor outcomes for the benefit of society is more important than ever. At a time of significant change, it is essential that CFA Institute continues to lead on ethics and professional standards to help sustain trust in markets.
How CFA Institute helps you
CFA Institute advances ethical practice through education and advocacy in areas such as investment performance measurement, conflicts of interest, and transparency and disclosure. “At its core, it’s about transparency around risks and performance expectations – particularly when investment strategies may be inherently complex and technical,” Naqvi says.
The CFA Institute Code of Ethics and Standards of Professional Conduct is the framework for how CFA charterholders should conduct their professional duties. It underpins the ethics component of the CFA Program for those studying to become CFA charterholders.
Charterholders must sign an annual professional conduct statement to attest that they have adhered to the code. As part of the enforcement process, any reports of ethics violations are investigated via a Disciplinary Review Committee. Any individuals found to have violated the Code and Standards can have their charter revoked.
The role of community in upholding ethical standards
Meanwhile, the Asset Manager Code is the application of the Code of Ethics at a firm-wide level.
It demonstrates to clients that ethics is a priority, and it’s a signal that you can trust the firm.
Unlike areas of conduct that fall under the jurisdiction of the regulator, ethical considerations are often inherently nuanced, and that requires something more than prescriptive rules.
How CFA Institute supports ethical practice
Ethical principles enshrined in the Code of Ethics and Standards of Professional Conduct are universal, however the context in which professionals apply those principles will evolve given the extent and pace of change in the investment industry. "The growing use of AI in an investment context is a case in point," Preece says.
To guide members through these nuanced ethical considerations, CFA Institute provides case studies, interpretive guidance, and illustrative examples through its research and other content published via the CFA Institute Research and Policy Center (RPC) to offer practical pointers on applying ethical standards to the evolving real-world scenarios practitioners face.
Being a CFA charterholder also offers access to a community that provides ongoing support throughout your career to help navigate complex ethical challenges as they emerge in a rapidly evolving world. “Our convening power is one of our greatest strengths,” Naqvi says. “Through our societies and chapters, we create forums for continued debate, dialogue, and education.”
For clients, trust remains the cornerstone of engagement. “Finance only works when trust is present,” Naqvi says. “The CFA® charter represents a commitment to professional competence and ethical conduct – foundations that sustain confidence in markets over time.”
How we support the finance industry
Learning
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Research
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The value of objective, evidence-based research for the profession.
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Who we are
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