Ethical Issues Paper

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Recent financial crises in 2008 have raised concerns about the complex ethical issues related to the financial services industry. The finance crisis forced millions of people losing their job, homes, and retirement savings. The government had to spend trillions of dollars to bailout some of the major financial institutions. Surprisingly, some of the top executives of the top investment banks appeared to have lost nothing in the crisis, but instead have gained millions of dollars for themselves (Inside Job, 2011). As a result, financial services industry is the least trusted to do the right thing by general public (Harper, 2013). The finance crisis of 2008 has raised awareness of the importance of ethical codes of conduct in the financial industry. …show more content…
Financial services employees and management need to place client interests far above the compensation interests of their own. Any financial institutions should create a working environment where financial service agents’ responsibility is to bring value to their clients’ lives. This behavior is one of the key factors to gain the public trust because conflicts of interest have been one of major ethical issues in the financial industry. Conflicts of interest occur when an institution or employee serves his or her interests at the expensive of others (Trevino). A recent survey of the industry in US and UK reveals interesting data on ethical issues: 30% of respondents reported their compensation or bonus plan created pressure to compromise ethical standards or violate the law (Sucharow, 2012). Financial institutions or employees can gain benefits by giving out misleading information to customers and investors. This also leads to financial losses of customers. Yet, the financial institutions and agents fill up their own pockets with fees and commission generated by their services. These actions totally conflict several ethical …show more content…
Obliviously, the consequence of the action of giving misleading information to investors which leads to their financial losses is bad. Financial services employees fail to protect their customers’ wealth in accordance to the industry’s principles.
The second proper ethical behavior that any financial agents should practice in their career is to provide professional services with integrity. To me, integrity is one of the most critical responsibilities that anyone who working in the finance field must assume. Customers will be more likely to choose and invest in a financial institution that operates according to principles of integrity. They believe that companies having integrity as their core values will offer the best possible services to its clients.
According to the survey in the financial industry, 24% of respondents believed that financial services professionals may need to engage in unethical or illegal conduct in order to be successful (Sucharow, 2012). I totally disagree with this idea. Engaging in unethical practice is wrong because financial service agents do not fulfill their duties and responsibilities, according to the deontological theory. Employees who commit unethical practices in finance also damage their reputation and their companies’ reputation as a whole. Their actions would not produce good consequences under
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