inspired capitalworks

Ethics

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Financial planning, and investment and wealth management, involve many different constituencies in each engagement—wealthholders, stakeholders, fiduciaries and professional advisors. Many times more often than not, satisfactorily meeting the needs, interests and objectives of each of these different constituencies will prove to be difficult, if not impossible. Decisions will need to be made nonetheless and ethical standards of care help professionals to more successfully lead all involved to outcomes that do more good than harm, are just and fair, and treat people with dignity and respect.

The need for an ethical framework for professionals in the allied disciplines of wealth management is not because they are inherently less ethical than others, but because ethical procedures are critical for developing a moral framework within which professionals can act ethically.

Ethics are embedded in the philosophical thought process of deciding between right and wrong, or more typically, between two rights. Establishing the process builds appropriate decision-making principles to reconcile conflicting values.

Professional ethics are standards that prescribe obligations of professionals in terms of fairness, rights of others, benefits to society, or specific virtues. Professional ethics prescribe respectful conduct and behavior by professionals engaging in activities of such consequence to others that they merit protection by guidelines for deliberate decision-making that stir moral conscience. Fiduciary ethics include standards that enjoin virtues of loyalty, objectivity, independence, and honesty, and include confidentiality standards relating to the right to privacy.

Virtuous ethics include attitudes, dispositions and character traits that enable us to be and to act in ways that develop our human potential. Utilitarian ethics focus on the consequences that actions or policies have on the well-being of all persons directly or indirectly affected by the action or policy. Ethics of individual rights incorporate the principle that actions or policies are morally right only if those persons affected by decisions are not used merely as instruments for advancing some goal, but are fully informed and treated only as they have freely and knowingly consented to be treated. The ethics of justice require consistency in the way people with relevant similarities are treated.

Certified, chartered and accredited professionals in the allied disciplines of wealth management—financial planning, life underwriting, risk management, investment management consulting, investment/portfolio management, estate/wealth transfer planning, philanthropic counsel, trust services, taxation, law and accounting—have all developed codes of ethics and professional standards prescribing essential behavior required in their professions.

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Inspired Capitalworks has adopted a Code of Ethics in compliance with Rule 204A-1 under the Investment Advisers Act of 1940 in order to specify the standard of conduct expected of all of its employees. The firm provides a written copy of its Code of Ethics to its clients.

All employees of the firm must comply with applicable federal securities laws. In particular, it is unlawful for the firm and any employee, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly:

     To employ any device, scheme or artifice to defraud any client or prospective
     client of the firm;

     To engage in any transaction, practice, or course of business which operates or
     would operate as a fraud or deceit upon any client or prospective client of the
     firm; or

     To engage in any fraudulent, deceptive, or manipulative practice.

In adopting the firm's Code of Ethics, the firm recognizes that it, and its employees owe a fiduciary duty to the firm's clients and must (1) at all times place the interests of the firm's clients first, (2) conduct personal securities transactions in a manner consistent with the firm's Code of Ethics and avoid any abuse of a position of trust and responsibility, and (3) adhere to the fundamental standard that employees should not take inappropriate advantage of their positions.

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We also find the words of James P. Owen, a 35-year veteran of the investment management industry and author of Cowboy Ethics: What Wall Street Can Learn from the Code of the West, appealing and on point with our own beliefs about behavior of wealth management professionals with their clients.

Jim Owen's CODE of the WEST
1. Live Each Day with Courage
2. Take Pride in Your Work
3. Always Finish What You Start
4. Do What Has to be Done
5. Be Tough, But Fair
6. When You Make a Promise, Keep It
7. Ride for the Brand
8. Talk Less and Say More
9. Remember, Some Things Aren’t For Sale
10. Know Where to Draw the Line


Reprinted with permission of James P. Owen.