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FIN 502 (69)
Chapter 20

Chapter 20.docx

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Department
Finance
Course
FIN 502
Professor
Steve Joyce
Semester
Winter

Description
Chapter 20 Ethics for Personal Financial Planners Jan 10 2012A Framework for Ethical DecisionMakingTwo matrices which guide the analysis of ethical issuesOne axis both matrix has in common is ethical indicators 1 Issues matrix Ethics IndicatorsTrust Fairness Efficiency Competence Conflict of Interest Information Asymmetry Power Asymmetry Fiduciary Relationship Moral Hazard Social Responsibility Issue CategoriesEthical Indicators characteristics of ethical business decisions or the ethical qualities that the planner should strive to incorporate always into his or her behavior o Trust the client can rely on the planner to tell the truth provide appropriate analysis and information about the clients needs and possible ways of meeting those needs explain the consequences of decisions and carry out client instructionso Fairness every client gets equal rights and equal treatment when there is a conflict and that unavoidable conflicts are resolved according to impartial rules ex mutual fund scandal o Efficiency how cheaply the planner can do the job beneficial because it keeps the price of the service down in a competitive market and may also reduce the clients time spent in analyzing and executing some financial transaction or plan ex it is important for a online broker to be efficient o Competence measure
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