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Licensed investment advisors must adhere to a code of ethics regarding business practices and client interaction. The investment advisor code of ethics is a set of standards that protects consumers and prevents inappropriate actions. Because many advisors are responsible for consumers' savings, and the security of their financial future, they are held to a moral paradigm. By understanding the code of ethics, consumers can determine if their representative is acting in accordance with industry guidelines. The Securities and Exchange Commission (SEC) and the Certified Financial Planner Board of Standards (CFP) each developed a code of ethics that advisors must follow.
By investing in ethical funds, financially promote a company or idea that has a good cause. Learn more about ethical funds with expert tips from a registered financial consultant in this free video on financial planning.
