Three Actions to Build a Better Investment ProfessionHow to take responsibility to better serve individual investors

1.Set High Standards of Entry and Professionalism

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Educators

  • Develop curricula that equip future professionals with financial competence, including technical skills, knowledge, and ethics
  • Focus on a broad perspective of the investment management industry's essential role in serving society

Firms

  • Hire those who commit to premium standards
  • Invest in their continuous learning and development
  • Publicly attest to the need for high standards of conduct as the foundation of a sustainable and profitable industry

Regulators

  • Demand standards of competency and ethics for investment professionals
  • Require professional credentialing to practice in the industry, such as the CFA charter
  • Recognize the value of a rigorous educational program and ethical standards to shape a more stable and effective financial system

Investment Professionals

  • Join a professional membership association
  • Become actively engaged to support a strong, self-regulating profession that has a body of established knowledge, sets standards of competence and conduct, and disciplines its members who violate an ethical code
  • Take responsibility to stay current in your professional knowledge

CFA Institute has led investment management credentialing and industry standard setting for over 50 years .Our members are bound by a professional code of conduct and are disciplined accordingly.

2. Create Business Models Geared Toward Achieving Investor Outcomes

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Firms

  • Abandon short-term, product-pushing business models
  • Build a culture that rewards client-centric thinking and doing the right thing, even when it isn't easy
  • Be transparent about your fees
  • Align your incentives with those of your clients
  • Create products that will benefit your investors more than your firm and employees

Individual Investors

  • Take the time to find out the right firm to achieve your goals
  • Investigate if the people managing your money have the training, experience, and ethical standing to merit your trust
  • Do a background check through a regulator database and check references
  • Don't underestimate the influence you have to shape the investment profession
  • Have high expectations of those you hire

Regulators

CFA Institute advocates for client-centric business practices through our global Putting Investors First initiative and codes and standards.

3. Strengthen Regulations that Align Firms and Clients

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Regulators

  • Enhance enforcement mechanisms and promote fairness in regulation across markets
  • Work with the industry to encourage investment practices that enhance investor safeguards and market integrity
  • Keep pace with new investment products and services to ensure they are serving investors

Firms

  • Hold yourself to a higher standard than what is required legally
  • Adopt internal codes and procedures that extend beyond the letter of the law and box-ticking exercises
  • Do not engage in lobbying that will harm your clients

Individual Investors

  • Hold your investment professional and their firm accountable
  • Report complaints for violations of securities laws or regulations, including fraud and unfair treatment

CFA Institute staff and members serve in influential roles with various regulators, government agencies, and standard-setting bodies. We partner with our member societies to develop relationships to improve the functioning of markets around the world.

In Summary, We Must Take Responsibility to Serve Individual Investors

Through collective action, we can help investors and clients to operate safely in securities markets and to increase their knowledge of the obligations of investment managers.

CFA Institute offers tools such as the Statement of Investor Rights and Integrity List to advance professional confidence and trust. We encourage individual investors to use these materials. Our 146 member societies worldwide have the reach and capability to help individual investors and clients better meet their goals.