Maintaining High Integrity and Ethical Practices as an Investment Adviser

Abstract

In finance, unethical behavior is a regular occurrence. Across History, and most notably the 2008 financial crisis, the age of risk-taking and profit maximization has been at the forefront of financial firms' and institutions' minds beyond the prioritization of integrity. Through the literature review, I researched this conversation to reveal the leading unethical practices that have arisen in the investment advisory industry. The main ethical problems include but are not limited to compensation, corporate culture, and risk-taking. In the scholarly conversation, articles bypass coming to a standard narrative that helps present a solution to these problems. Establishing my research question, “How can Investment Advisers in the United States most effectively promote ethical behavior beyond having good intentions alone?” Semi-structured interviews with six investment advisers were used to accomplish this best. Then a thematic analysis was used, with the most common themes being acting voluntarily, establishing a moral framework, and fostering knowledge through mentorship and experience. After the conversation of these themes, I present a standard narrative. From establishing the themes such as ethical obligation and knowledge, virtue ethics, an ancient philosophy coined by Aristotle in his book “The Nicomachean Ethics,” which encompasses moral and intellectual virtues, will most effectively bridge the absence of ethics in the industry. It is an advanced moral perspective young advisers usually do not have; therefore, researchers must study the role of virtue ethics in the industry and its implications.