Analyst Ethics

Overview

Analysts have fiduciary duties toward their clients, duties that exceed those considered acceptable in other business relationships because of the trust placed in them. When analysts serve as fiduciaries, they owe undivided loyalty to their clients and must place client interests before their own. Such priorities enhance investor confidence in the capital markets, and in the reputation of investment research analysts, their firms, and financial markets.

Our work on analyst objectivity is based on our Research Objectivity Standards, which offer specific, measurable standards for managing and disclosing conflicts of interest and recommend specific practices to guide investment firms and their respective employees.

Research Objectivity Standards

The CFA Institute Research Objectivity Standards help sell-side investment firms and professionals develop objective and independent research reports. They include specific, measurable standards for managing and disclosing conflicts of interest.

CFA Institutes Research Objectivity Standards Cover:

  • Firms' research policies
  • Public appearances
  • Investment banking
  • Analyst compensation
  • Relationships with other companies
  • Personal investments and trading
  • Timeliness
  • Rating systems

These standards should be adopted:

  • To maintain your firm's reputation; ethical misconduct hurts investor confidence and taints the reputations of all investment professionals;
  • To gain the competitive advantage that comes from having a reputation for integrity and putting investors' needs before your own;
  • To demonstrate your commitment to high ethical standards and full disclosure.

 

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