Professional Ethics Case Study
A Structured Investment Product for Retail Customers
How do the CFA Institute’s principles of professional ethics apply to the marketing and distribution of a structured investment product to retail customers?
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Inspired by recent final notices issued by the Financial Conduct Authority (FCA) against an investment bank and a retail financial services company, the issues considered in the case study include:
- Is it a misrepresentation to promote the structured product’s potential maximum return if it has only a low probability of being achieved?
- What steps should a CFA Charterholder take to comply with the duties of loyalty, prudence and care when distributing such a product to individual target customers?
- How should one approach the issue of suitability depending on whether the relationship with a target customer is advisory or non-advisory?
- What risks and limitations of a structured product should a CFA Charterholder bring to the attention of a prospective customer?
The case study is fictional and is not intended to be an accurate or comprehensive summary of the facts of any cases or FCA’s findings.
Further case study examples
If you are entering CFA UK Ethics Case Study competition the following examples might help provide you with some inspiration.
Below are some more example case studies based on FSA final notices