5 Ethics Every Financial Adviser Must Have
•By Mahersaham Team
Artikel ini juga tersedia dalam Bahasa Melayu
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5 ethics that every financial adviser MUST pay attention to.
You can use this guide before becoming a professional financial adviser.
Conversely, if you are someone seeking their professional services, remember all five ethics shared here.
This way, it will be easier for you to place your trust in them.
Is integrity the same as or different from ethics?
Integrity is the practice of being honest and demonstrating consistent and uncompromising adherence to strong moral and ethical principles and values.
In ethics, integrity is regarded as the honesty and truthfulness or accuracy of one''s actions.
Integrity inspires trust — ''integrity inspires trust''.
Without integrity, we would live in disgrace, corruption, and dishonesty.
Integrity inspires trust within your family, with colleagues, and in your personal relationships.
When trust is lost, it is difficult to ask people to trust you again.
Safeguarding client interests is a measure of a financial adviser''s professionalism. It is assessed through the ethical fulfilment of responsibilities.
A financial adviser must know the ideal and optimal investment solution or plan based on the client''s profile. Besides helping clients to the best of their ability, they should treat clients as partners who need assistance.
This is because every client has a different case study.
Even after obtaining and passing professional certifications, upgrading one''s knowledge in line with changing times is essential. This ensures that the advice given does not become ''out-of-date''.
Various revolutions in technology have impacted the financial industry. Therefore, the input provided must adapt to the ever-changing financial landscape.
Additionally, gaining knowledge and expanding expertise, whether in the same career or other fields, is highly encouraged.
In professional duties, ''Continuing Professional Development'' (CPD) has been introduced. It involves any courses or seminars, whether formal and structured or informal.
Each year, a minimum of 20 points must be obtained by participating in any courses or seminars.
(CPD/CPE for Phillip Investment Conference 2019)
Being fair, transparent, and honest is a religious obligation. A person who is fair will not wrong others.
This career should be used as a platform to seize opportunities to do charitable deeds.
While carrying out duties, humanitarian values must be present in every individual regardless of their title.
Communicate transparently without concealing any information for personal gain.
Do not forget, everything we do is always being watched by the All-Seeing. Therefore, be honest in your work so that you receive blessings in life.
A core value for a financial adviser is being trustworthy in protecting clients'' personal information.
This matter is confidential as it encompasses ''private and confidential information''.
When analysing a client''s profile, this information must be recorded either ''on paper'' or electronically.
Examples of personal information include name, address, and identification card number. Sensitive information consists of medical records and financial status.
All client information must be kept from the knowledge of others.
Financial advisers can be charged under the Personal Data Protection Act 2010 (Act 709).
Do not worry — if trustworthiness is practised while carrying out duties, there will be no legal disputes between the financial adviser and the client.
A financial adviser must always remain professional without being biased towards any product or prospect.
Favouring one product over another should never exist.
They must never give recommendations that are not ideal and could be detrimental to the client.
Different people require different approaches.
That is why the public is advised to be more careful when accepting any advice, especially when it involves finances.
A technique that works for someone else may not necessarily work for you.
Financial advisers are also prohibited from mixing personal matters if there is a disagreement with a client.
A person''s thinking can be influenced when they are in an emotionally unstable state.
Do not let emotions control you when making decisions, especially when analysing a client''s profile.
Always remain calm.
Choose the right financial adviser. When someone says "Oh, this financial adviser is great", investigate the individual''s background first.
Additionally, do not let someone who is not skilled manage your financial profile.
Make the right choice because the right financial adviser will result in effective and impactful financial planning.
That is why you should look for a financial adviser who is AUTHORISED and LICENSED, not ''self-claimed''.
Do not worry — there are many professional and ethical financial advisers out there. They genuinely strive to help clients by providing the best service.
So, before you engage the services of an experienced and knowledgeable financial adviser, make sure they do not neglect these five ethics while carrying out their duties.
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An ethical financial adviser always prioritises client interests, is transparent about fees and commissions, and never makes unrealistic return promises. They also hold a valid licence from BNM or the SC and are willing to explain the risks of every financial product honestly.
Unlicensed advisers are not subject to regulatory oversight, meaning there is no legal protection if losses occur due to bad advice. You also risk falling victim to fraudulent investment schemes. Always verify licences through the BNM or SC website before engaging their services.
Not necessarily. Many successful stock investors make their own decisions by learning fundamental and technical analysis. However, a financial adviser is useful for comprehensive planning including insurance, retirement savings, and debt management — especially if you are new to the financial world.
Costs depend on the payment model — some advisers charge a flat fee, while others earn commissions from products sold. Make sure you understand the fee structure before appointing an adviser. An ethical adviser will explain all costs transparently.
Choosing an ethical and licensed financial adviser is important, but having your own financial knowledge remains your greatest asset — it enables you to make smarter and more informed investment decisions.
Open a CDS account to start investing in stocks on Bursa Malaysia independently with the right knowledge.
Download our free stock basics ebook to learn the fundamentals of stock investing before taking your first step.
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