TRUST APRIL 2018 SUSAN NAUGHTON ACII LCOI AGENDA ISSUES THAT NEED - - PowerPoint PPT Presentation

BROKERS IRELAND ETHICS 2018

TRUST APRIL 2018

SUSAN NAUGHTON ACII LCOI

AGENDA

ISSUES THAT NEED TO BE ADDRESSED

MOST REPORTED ETHICAL LAPSES IN 2017

KEY FINDINGS OF IBE SURVEY

BARONESS ONORA O'NEILL:

WHAT WE DON'T UNDERSTAND ABOUT TRUST

JOHN BOATRIGHT

John R Boatright, Ethics in Finance (3rd Edn)John Wliey& Sons UK 2014 p2

Ethical misconduct is not always a matter of bad people doing bad things but often good people who stumble unwittingly into wrongdoing.

NOT CRICKET

ACTION

PETTY CHEATING but with conduct unbecoming and bringing the game into disrepute. No one died, No one doped, No one Injured No one fixed, Umpires did not change the ball.

CONSEQUENCES

• Swift and severe punishment

for Smith and Co

• Warner and Smith have both

been cut from this year’s Indian Premier League, too.

• Loss of Multiple Sponsorships

for the team and the players and reduced value of TV

SPONSORS SAY

• Ball-tampering scandal

‘inconsistent’ with firm’s values’

• “The decisions and actions

taken by David Warner and Cameron Bancroft are not something that Asics tolerates and are contrary to the values the company stands for,” a statement read

CHESHIRE CALHOUN

CHESHIRE CALHOUN, & ORS HONEST WORK, A BUSINESS ETHICS READER, NY OUP2007 P130-1

On integrity …a master virtue, that is, less a virtue in its own right than a pressing into service of a host of

• ther virtues

Self knowledge, Strength of will Courage, Honesty, Loyalty, Humility, Civility, Respect Self Respect

INTEGRITY V MISCONDUCT

• Finance impossible

without ethics.

• Placing assets in hands of
• ther people requires

immense trust

• Personal selling creates

innumerable

• pportunities for abuse
• Despite industry pride in

levels of integrity misconduct still occurs.

OBJECTIONABLE PRACTICES

• Deception
• Churning
• Suitability

DECEPTION

ETHICAL ISSUE: ABILITY OF CLIENTS TO MAKE RATIONAL CHOICES Letter of the law

• Explain all relevant

information

• Product Design
• Disclose information about

commission Spirit of the Law

• Truthful, Understandable Non

misleading

• What's revealed what's not
• Strengths & Weaknesses
• Past Performance
• Fees Charges Commission
• Explain the disclosure

Documents

Boatright J, Ethical issues in Finance & Accounting Ethical Theory & Business Ed Beauchamp & Ors, Pearson Intermnational Edition p. 388.

CHURNING

ETHICAL ISSUE: BREACH OF FIDUCIARY DUTY TO TRADE IN WAYS THAT ARE NOT IN A CLIENTS BEST INTEREST.

Letter of the Law

• Broker Control
• Nature of the Account v

Volume of Trades

• Intent of the Broker

Spirit of the Law

• Prohibition of Sales

Contests

• % of commission related to

size of Clients account – not volume of transaction

• Training & Oversight in firms

SUITABILITY

ETHICAL ISSUE: DUTY TO RECOMMEND ONLY SUITABLE FINANCIAL PRODUCTS

• Fact Find - KYC
• Product research
• Suitable
• Risk Appetite
• Ability to pay
• Specialised Knowledge
• Deliver good outcomes
• Reliable Markets

5.19 CPC

FAIRNESS

THE LEVEL PLAYING FIELD PHILOSOPHICAL ARGUMENT = FAIRNESS

BUILDING TRUST

WHAT WOULD MAKE IT BETTER

CODE OF PRACTICE

Extract from American Institute of Certified Public Accountants Code of professional Conduct

• Responsibilities
• Public Interest
• Integrity
• Objectivity & Independence
• Due Care
• Scope and Nature of Services

ELEMENTS OF CODE OF PRACTICE

Responsibilities In carrying out their responsibilities as professionals, members should exercise sensitive professional and moral judgements in all their activities Public Interest Members should accept the

• bligation to act in a way that

will serve the public interest, honour the public trust and demonstrate commitment to professionalism

ELEMENTS OF CODE OF PRACTICE

Integrity To maintain and broaden public confidence members should perform all professional responsibilities with the highest sense of integrity Objectivity & Independence A member should maintain

• bjectivity and be free of

conflicts of interest in discharging professional

• responsibilities. A members

should be independent in fact and appearance

ELEMENTS OF CODE OF PRACTICE

Due Care A members should observe the professions technical and ethical standards, strive continually to improve competence and quality

• f services and discharge professional

responsibility Scope and Nature of Service A member should observe the principles of the codes of professional conduct in determining the nature of services to be provided

A FINAL THOUGHT …

Three Groups Will Pay Won’t Pay Will think about it

WHAT’S 8 %

1.

CRH : 76,000

6080

2.

Smurfit Kappa 41,000

3280

3.

Kerry Group 24,492

1959

4.

Tesco Ireland 14,925

1194

5.

Dunne’s Stores14,000

1120

6.

Boston Scientific 11,800

944

7.

Allied Irish Bank 11,384

910

8.

Bank of Ireland 11,255

900

9.

Icon Plc 10,300

824

• 10. Perrigo 10,220

817

IN CONCLUSION

END

QUESTIONS ANSWERS