CFA Institute Ethical Decision Making

1. ETHICAL
DECISION
MAKING
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AUDIO/VIDEO TRANSCRIPTS
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v.1.0

2. ETHICAL DECISION MAKING 2
PAUL SMITH, CFA
President and CEO
CFA Institute
WELCOME
Hi. I’m Paul Smith, CEO of CFA Institute.
Thank you for your interest in this
course.
CFA Institute has a strong commitment
to promoting the highest standards
of ethical behavior among investment
professionals. I’m glad you’re here to
learn more about our Ethical Decision
Making Framework and I hope it helps
you navigate any tricky ethical situations
you may experience in your career.

3. ETHICAL DECISION MAKING 3
JONATHAN BOERSMA, CFA
Head, Professional Standards
Executive Director, Global Investment Performance Standards, CFA Institute
COURSE INTRODUCTION
Hello, I’m Jonathan Boersma, Head of
Professional Standards at CFA Institute.
More than ever before, investors
want to trust those responsible
for managing their assets. As an
investment professional, you can earn
your clients’ trust by demonstrating
honesty, integrity, and ethical conduct
in your daily decisions and actions.
The purpose of this course is to help
you understand fundamental ethical
principles through the application of a
decision making framework. Through
your efforts, together, we can build a
stronger, more trustworthy investment
industry.
Ethical issues are a normal and predictable part of most jobs. If you find yourself
in a situation where the proper course of action is unclear, that doesn’t mean
you’ve done something wrong. The vast majority of investment professionals are
honest, well-meaning people who want to do the right thing. The CFA Institute
Ethical Decision Making Framework was created to help you analyze and evaluate
ethical situations before they become unmanageable—or even destructive.

4. ETHICAL DECISION MAKING 4
NARRATOR
ETHICAL PRINCIPLES & FRAMEWORK
First, we will present common ethical
principles. These include putting
client interests first, full and fair
disclosure, suitability, not using
material nonpublic information,
fair dealing, confidentiality,
independence and objectivity, and
diligence and a reasonable basis.
Next, we will examine the key
elements of the ethical decision
making framework. Lastly, we will
offer a series of real-world case
studies to help you apply the
framework to identify, consider, and
reflect on ethical decision making.

5. ETHICAL DECISION MAKING 5
FRAMEWORK FOR
ETHICAL DECISION MAKING
NARRATOR
Now that we know the fundamental
ethical principles, how do we apply
them? The Ethical Decision Making
Framework will help you identify,
consider, and reflect on important
factors for your decision making.
First, we identify the inputs needed
to make an informed choice. What
is the ethical principle at issue?
Are there any conflicts of interest?
What duty is owed? What are the
important facts?
Next, we consider what else may
affect your course of action. Are
there any negative situational influences or biases steering your analysis? What
are the alternative actions that may be a better choice? Can others give you
guidance in this matter?
Combining knowledge of the ethical principles with an application of the
Framework will allow you to properly analyze decisions and choose an ethical
course of action.
You may refer back to this Ethical Decision Making Framework when analyzing
the upcoming case studies.

6. ETHICAL DECISION MAKING 6
NARRATOR
CASE STUDIES
For the remainder of this course,
you will be asked to analyze several
case studies by applying the ethical
decision making framework.
The facts associated with each case
study will be presented in different
mediums, such as video, email, and
voicemail.
For each case study you will apply
the framework by answering a series
of multiple choice questions. To help
you answer the questions, each
question provides links to reference
materials including the case facts,
the Ethical Decision Making Framework, and the Fundamental Ethical Principles.
Once you submit your answer, the next question will appear.
At the end of each case study you will be able to review your responses as well
as the recommended answers.

7. ETHICAL DECISION MAKING 7
SCORING YOUR APPLICATION
OF THE FRAMEWORK
NARRATOR
As you know, our relationships with
clients, and even potential clients,
are built on trust. We earn that trust
by demonstrating ethical behavior.
In the following case studies, you
will have the opportunity to attract
clients to your virtual “office” by
demonstrating good ethical decision
making.
For each correct response you earn
one client. Because each case study
has seven questions, you can earn
up to seven clients per case study.
At the end of each case study, you
will be able to see how many clients you have earned per case and in total. After
completing all of the case studies, you will learn whether or not you have earned
enough clients to successfully pass the course and receive a certificate of
completion.

8. ETHICAL DECISION MAKING 8
NARRATOR
MEET THE CHARACTERS
All cases will involve employees of
the fictional asset management firm,
Revolutionary Investment Strategies
(RIS). Let’s meet them now:
• George, President and CEO
of Revolutionary Investment
Strategies
• Daniel, a portfolio manager at
RIS who reports to George
• Kate, a research analyst at RIS
who is a colleague of Daniel
and also reports to George
Cases may also involve clients of RIS
who will be more fully described in the facts of the cases in which they appear.