What is the primary role of professional ethics in the investment profession?

The primary role of professional ethics in the investment profession is to facilitate fair competition and protect investors. This is essential because the investment industry operates in an environment where trust is paramount. Investors rely on the integrity and professionalism of those managing their funds. The establishment of ethical standards promotes transparency, honesty, and accountability, which in turn fosters a level playing field where all market participants can compete fairly.

Additionally, adhering to professional ethics helps prevent fraudulent activities and misconduct, thereby safeguarding the interests of investors. This is crucial for maintaining confidence in the financial markets, encouraging participation from investors, and ensuring that they can make informed decisions based on accurate and trustworthy information. In essence, the ethical framework in the investment profession serves to uphold the highest standards of practice, ultimately leading to a more robust and credible marketplace.