CFA & Ethics

[pfflyer]

I was researching requirements for CFA exams here: http://en.wikipedia.org/wiki/Chartered_Financial_Analyst

and there is lots of discussion about professional ethics. After everything that has happened how can they still profess to care about ethics? Really?

[davelj]

That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

There are a long list of CFAs that get censured each year to varying degrees, so it’s not as if the organization is completely asleep at the wheel. But it’s not easy to track unethical conduct.

So, I think you’re confusing the goals of the organization with the actual conduct of certain individual members. Two completely different things. I think there are very few professional organizations that are particularly effective at enforcing ethics – CFA Institute or otherwise. But, at the organizational level, they all claim that it’s important… of course.

[davelj]

That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

There are a long list of CFAs that get censured each year to varying degrees, so it’s not as if the organization is completely asleep at the wheel. But it’s not easy to track unethical conduct.

So, I think you’re confusing the goals of the organization with the actual conduct of certain individual members. Two completely different things. I think there are very few professional organizations that are particularly effective at enforcing ethics – CFA Institute or otherwise. But, at the organizational level, they all claim that it’s important… of course.

[davelj]

That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

There are a long list of CFAs that get censured each year to varying degrees, so it’s not as if the organization is completely asleep at the wheel. But it’s not easy to track unethical conduct.

So, I think you’re confusing the goals of the organization with the actual conduct of certain individual members. Two completely different things. I think there are very few professional organizations that are particularly effective at enforcing ethics – CFA Institute or otherwise. But, at the organizational level, they all claim that it’s important… of course.

[davelj]

That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

There are a long list of CFAs that get censured each year to varying degrees, so it’s not as if the organization is completely asleep at the wheel. But it’s not easy to track unethical conduct.

So, I think you’re confusing the goals of the organization with the actual conduct of certain individual members. Two completely different things. I think there are very few professional organizations that are particularly effective at enforcing ethics – CFA Institute or otherwise. But, at the organizational level, they all claim that it’s important… of course.

[davelj]

That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

There are a long list of CFAs that get censured each year to varying degrees, so it’s not as if the organization is completely asleep at the wheel. But it’s not easy to track unethical conduct.

So, I think you’re confusing the goals of the organization with the actual conduct of certain individual members. Two completely different things. I think there are very few professional organizations that are particularly effective at enforcing ethics – CFA Institute or otherwise. But, at the organizational level, they all claim that it’s important… of course.

[pfflyer]

I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?

[pfflyer]

I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?

[pfflyer]

I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?

[pfflyer]

I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?

[pfflyer]

I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

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