THE FUTURE OF FINANCE TOWARDS A SUSTAINABLE FINANCIAL ECOSYSTEM - - PowerPoint PPT Presentation

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THE FUTURE OF FINANCE TOWARDS A SUSTAINABLE FINANCIAL ECOSYSTEM - - PowerPoint PPT Presentation

Jan 22, 2024 322 likes •666 views

THE FUTURE OF FINANCE TOWARDS A SUSTAINABLE FINANCIAL ECOSYSTEM Barbara S. Petitt, PhD, CFA Director, Curriculum Projects, EMEA 28 November 2013 CFA INSTITUTES FIVE ORGANIZATIONAL PILLARS Ethical Championing ethical behaviour in

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THE FUTURE OF FINANCE TOWARDS A SUSTAINABLE FINANCIAL ECOSYSTEM

Barbara S. Petitt, PhD, CFA Director, Curriculum Projects, EMEA 28 November 2013

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  • Championing ethical behaviour in

investment markets.

Ethical Champion

  • Creating a strong community of

investment professionals.

Global Community

  • Being a respected source of knowledge in

investment markets.

Industry Knowledge

  • Raising standards of professional

excellence in the investment industry.

Professional Excellence

  • Build an investment industry that serves

the interests of investors and society.

The Greater Good

CFA INSTITUTE’S FIVE ORGANIZATIONAL PILLARS

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Opiners

MAIN POINT

Intermediaries Users of Capital Providers

  • f

Capital Traders

  • f Capital

Groundskeepers:

  • Regulators
  • Self-Regulatory Organisations
  • Universities
  • etc.

Capital Assets/Securities Opinions

THE FINANCIAL ECOSYSTEM

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THE SOCIAL CONTRACT BETWEEN FINANCE PROFESSIONALS AND THOSE WE SERVE HAS BEEN BROKEN

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“The problems should have gone away when Congress passed financial reforms in 2010. But problems in the industry still exist.” “From a busted broker with missing customer money to billion dollar trading blunders to lying about LIBOR…” “A scandal over rigging of key interest rates could plunge the global banking industry into a legal morass that could last years…”

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Global Economy Global Economy

THE FINANCIAL ECOSYSTEM HAS GONE AWRY

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According to the 2013 Edelman Trust Barometer, the financial services industry is the least trusted industry globally. LAST!

WE MUST RESTORE TRUST IN FINANCE

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From “Stewardship” by John Taft. This material is reproduced with permission of John Wiley & Sons, Inc. 8

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56% of respondents blame poor ethics ETHICS IS CORE

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Investors who do not trust the industry are unlikely to:

  • Save and invest for their future
  • Achieve their long-term financial objectives

A “savings gaps” means:

  • Longer working lives
  • Lower quality of life
  • Intergenerational stress

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THE COSTS OF FAILURE OF TRUST

Social impact

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WE MUST RESTORE BALANCE TO THE FINANCIAL ECOSYSTEM

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FUTURE OF FINANCE

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http://www.cfainstitute.org/learning/future/about/Pages/index.aspx

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MISSION To lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. STRATEGY Broader Mission + Bolder Voice + Bigger Community FRAMEWORK The Future of Finance Starts With You To shape a trustworthy, forward-thinking financial industry that better serves society

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CFA INSTITUTE AND EDELMAN 2013 INVESTOR TRUST STUDY

CFA Institute and Edelman partnered to understand the state of trust in the investment industry. The study conducted in July 2013 surveyed 1,604 retail and 500 institutional investors in the United States, United Kingdom, Hong Kong, Canada and Australia.

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FUTURE OF FINANCE TOPIC AREAS

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FUTURE OF FINANCE TOPIC AREAS

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Our Goal: To foster a trustworthy environment in which financial agents serve their clients in an ethical and professional manner. Key Solutions:

  • Statement of Investor Rights
  • Asset Manager Code of Conduct

FUTURE OF FINANCE TOPIC AREAS

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  • 1. Honest, competent, and ethical conduct that

complies with applicable law;

  • 2. Independent and objective advice and assistance

based on informed analysis, prudent judgment, and diligent effort;

  • 3. My financial interests taking precedence over those
  • f the professional and the organization;
  • 4. Fair treatment with respect to other clients;
  • 5. Disclosure of any existing or potential conflicts of

interest in providing products or services to me;

  • 6. Understanding of my circumstances, so that any

advice provided is suitable and based on my financial

  • bjectives and constraints;
  • 7. Clear, accurate, complete and timely

communications that use plain language and are presented in a format that conveys the information effectively;

  • 8. An explanation of all fees and costs charged to me,

and information showing these expenses to be fair and reasonable;

  • 9. Confidentiality of my information;
  • 10. Appropriate and complete records to support the

work done on my behalf. Demanding that financial professionals abide by these rights helps you build trust in the person and/or firm you engage with, and thereby collectively restore trust, respect, and integrity in finance. WHEN ENGAGING THE SERVICES OF FINANCIAL PROFESSIONALS AND ORGANIZATIONS, I HAVE THE RIGHT TO…

STATEMENT OF INVESTOR RIGHTS

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FUTURE OF FINANCE TOPIC AREAS

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Claritas Investment Certificate Our Goal: To support financial education by providing resources that will help Investment professionals make decisions that better serve their clients. Key Solution:

  • CFA Institute Education Products
  • Financial Market History Project

FUTURE OF FINANCE TOPIC AREAS

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FUTURE OF FINANCE TOPIC AREAS

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Our Goal: To encourage sound retirement planning based on understanding of key issues. Example: Pension Trustee Code of Conduct

FUTURE OF FINANCE TOPIC AREAS

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FUTURE OF FINANCE TOPIC AREAS

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Our Goal: To promote markets that ensure that all investors have access to accurate, complete, relevant, and timely information so that they can make sound decisions. Key Solution: Principles for Investment Reporting

FUTURE OF FINANCE TOPIC AREAS

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FUTURE OF FINANCE TOPIC AREAS

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Our Goal: To advocate globally for workable regulatory and market solutions that promote fair and efficient capital markets. Recent examples:

  • Report on Dark Pools
  • Comment letter to the European

Parliament on Market Manipulation

FUTURE OF FINANCE TOPIC AREAS

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FUTURE OF FINANCE TOPIC AREAS

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Our Goal: To create a better understanding

  • f and develop resolutions for

existing and potential risks that could adversely impact the global financial system. Key Initiatives: Seek influential partnerships and support activities to promote a sound financial system, e.g., the Systemic Risk Council

FUTURE OF FINANCE TOPIC AREAS

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Focus Areas Ecosystem Actors

  • Providers of Capital
  • Users of Capital
  • Intermediaries
  • Traders of Capital
  • Regulators
  • Analysts
  • Investment Managers
  • Universities
  • Media

Impact

  • n

Future of Finance

ACTION

HOW CAN YOU MAKE A DIFFERENCE?

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The CFA Institute Integrity List is a collection of 50 tangible steps that investment professionals can take to restore trust in the investment industry. The list was inspired by “real-world” ideas from CFA charterholders and members.

  • Require training on ethical decision-making for yourself

and your firm.

  • Place the client’s interests before your own.
  • Name and shame unethical behaviour.
  • Recommend products with transparent payoffs, costs,

and risks.

  • Help clients focus on risk as much as they do on

performance. For complete CFA Institute Integrity List online, visit: www.cfa.is/50WaysRestoreTrust

HOW CAN YOU HELP REBUILDING TRUST IN THE FINANCIAL ECOSYSTEM?

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  • CFAInstitute.org/FutureFinance
  • Designed to drive engagement and

sharing

  • Focus on depth of content on Future of

Finance topic areas, with continual updates

  • Centerpiece of a integrated

communications campaign: advertising, public relations, social media, etc., focused on “The Future of Finance Starts With You”

Putting Investors First Regulation & Enforcement Transparency & Fairness Financial Knowledge Retirement Security Safeguarding the System

VISIT THE FUTURE OF FINANCE WEBSITE

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Elizabeth Corley, CEO, Allianz Global Investors Chair John Kay, Economist and Author Keith Ambachtsheer, Director, Rotman International Centre for Pension Management, Rotman School of Management, University

  • f Toronto

Paul Chow, Former Chief Executive, Hong Kong Exchanges and Clearing Limited Tom Keene, CFA, Editor-at-Large, Bloomberg News Ira M. Millstein, Senior Partner, Weil, Gotshal & Manges LLP, and Co-Chair

  • f the Millstein Center for

Global Markets and Corporate Ownership, Columbia Law School Saker Nusseibeh, CEO and Head of Investment, Hermes Fund Managers Barbara Novick, Vice Chairman, BlackRock Robert C. Pozen, Senior Lecturer, Harvard Business School and Senior Fellow, Brookings Institution John Taft, CEO at RBC Wealth Management Andrew Sheng, President, Fung Global Institute Robert Shiller, Sterling Professor of Economics at Yale University Andrew Lo, Charles E. and Susan T. Harris Professor of Finance at the MIT Sloan School of Management and Director

  • f MIT's Laboratory for

Financial Engineering Mary Schapiro, Managing Director at Promontory and Former Chairman of the U.S. Securities and Exchange Commission (SEC) Ng Kok Song, Adviser and Chair of Global Investments at the Government of Singapore Investment Corporation (GIC)

THE FUTURE OF FINANCE ADVISORY COUNCIL

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THE FUTURE OF FINANCE STARTS WITH YOU!

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