The Libor scandal has opened up windows to some ugly practices that haunt our industry. Manipulation of markets and benchmarks upon which values are set that affect people’s everyday lives seems to be one aspect of an industry gone wild in many respects.
More shocking is the attitude of industry professionals towards ethical practices. A survey of 500 professionals in America and Britain was conducted by New York law firm Labaton Sucharow to gauge willingness to out abuses and wrongdoing and toward the regulatory landscape in general.
This Website Is For Financial Professionals Only
A full 24% of respondents believed that engaging in wrongdoing or unethical practices was a prerequisite for success. Another 26% said they had seen such wrongdoing firsthand in their firms. As for insider trading? Sixteen percent said they would do it if given the chance and if they felt they would not be caught.
Thirty percent said the structure of their compensation plan encouraged unethical behavior. Only 30% felt regulatory authorities sufficiently uncovered, addressed, and/or prevented wrongdoing and unethical practices.
No wonder it’s more difficult to earn clients’ trust! As if Enron, Worldcom, 2008, Madoff, and Stanford (among others) were not enough, the willingness of industry participants to engage in fraudulent and unethical practices makes it even more important for those of us who take fiduciary duty and the privilege of providing top level service to clients to speak out
Social media is a perfect way to make our voices heard. We can no longer afford just to keep our own hands clean. Why not become industry leaders by speaking out, blogging, and building community around ethical practices? It’s the best way to grow our businesses. And the real key to a win/win level of success.
And if you're afraid of retaliation from your firm? Maybe it's time to change firms or strike out on your own. There is strength in numbers. Building community around ethical practices may enable you to build an unpenetrable wall of strength.