The CFA Institute has written to the Treasury arguing that it is almost impossible to regulate against bad ethics in the financial services industry but asking participants to take a personal oath of integrity to put investors rights first.
The letter, distributed to the media today, states "recent events have shown that industry ethics in particular need to improve and as such our industry is rightfully under scrutiny from the government and the community to better our standards".
"Unfortunately, it is almost impossible to regulate against bad ethics," the letter said. "Ethics is first and foremost about personal attitude, laying the foundation for organisational culture rather than for its governance."
"Regulation at most can only discipline those whose moral judgement has faltered, by which time the damage has already been done to investors and to our reputation as an industry. The moral imperative behind this point is even more relevant in a country like Australia where nearly every member of our community is an investor through mandated superannuation."
The CFA letter then claims that the way to achieve the levels of ethics and integrity that investors so rightfully deserve and expect "is to ensure the individuals in our industry take a personal oath of integrity that puts investor rights front and centre of everything they do, every day".
"High standards of personal ethics and regard for market integrity are critical to building the world-class industry; without them, we will not learn the lessons of the past and our industry will again find itself scrutinised for the same reasons somewhere down the line," it said.
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