The Economist Intelligence Unit's survey, released today, also found that 91 per cent of the executives feel that aspiring to a globally recognised set of ethical standards would make the financial services industry more resilient.
As many as 53 per cent of the financial services executives, who participated in the survey, felt that strictly adhering to ethical standards inhibits career progression at their firm.
"While executives champion ethical conduct, they struggle to see the benefits of greater adherence to ethical standards, reporting that, in reality, it can hamper career progression in the industry as well as the firm's competitiveness," it said.
The survey covered 382 financial services executives and 50 officials from firms that support the financial services. Sponsored by CFA Institute, it was conducted in September and there are also respondents from India.
According to the findings, there is widespread belief in the importance of ethics among financial services employees.
"Respondents would also prefer to work for a firm that has a good reputation for ethical conduct than for a bigger or more profitable firm with questionable ethical standards," the survey report said.
Another finding is that majority of the respondents admitted that their colleagues know very little about what goes on in departments beyond their own.
"This shows that a silo culture is pervasive in the industry, with departments acting unilaterally rather than viewing themselves as part of the wider business, suggesting integrated functional and management approaches to risk-proof organisations remains weak," the survey report said.
91% of financial executives support the notion that aspiring to a globally recognised set of ethical standards would make the financial services industry more resilient
67% of firms have raised awareness of the importance of ethical conduct by all employees
53% of financial services executives say strictly adhering to ethical standards inhibits career progression at their firm
62% of financial executives dont know what is going on outside their department
61% of financial executives highlight gaps in employees knowledge as a significant risk for their firm
59% of financial executives agree improving knowledge of the industry as a whole would help make their firm more resilient
12% say they are confident in their knowledge of the global regulatory environment
Read report: CFA Institute/Economist Intelligence Unit Study: New study highlights significant gap between perception and practice of ethical behavior in financial services
Addressing culture must be a top priority for creating a resilient and trustworthy financial services industry
A study released today by the Economist Intelligence Unit and sponsored by CFA Institute has shown that although financial services executives overwhelmingly recognize the importance of ethical behavior in the industry, there is still a significant gap between that belief and the industrys practices. The study, A Crisis of Culture: Valuing Ethics and Knowledge in Financial Services, shows that strengthening culture based around driving integrity and financial knowledge across firms is a priority for the financial services industry.
Despite the importance placed on creating a stronger ethical culture since the financial crisis, a serious disparity still exists when it comes to executives recognition that adhering to those higher standards will help earn trust, foster career progress and support financial performance. Although 91% of survey respondents placed equal importance on ethical behaviour and financial success, more than half (53%) think career progression at their firm would be difficult without being flexible on ethical standards, and just 37% believe that their firms financials would improve if the ethical conduct of employees improved.
The study also looked at the critical issue of knowledge in the industry. Whilst 97% of respondents said that they are well qualified for their own role, 62% admit that their colleagues know very little about what goes on in departments beyond their own. This shows that a silo culture is pervasive in the industry, with departments acting unilaterally rather than viewing themselves as part of the wider business, suggesting integrated functional and management approaches to risk-proof organisations remains weak.
John Rogers, CFA, president and CEO of CFA Institute, commented:
CFA Institute sponsored this study in order to take the temperature of the financial services industry as we begin to emerge from the financial crisis. The results show that the industry has further to go on its journey to drive up ethical standards and embrace professional education. It also shows signs of a shift in culture by recognizing the benefits of global ethical standards and industry knowledge, and addressing agency issues. If we are to move the industry forward it is incumbent upon everyone within the industry to align their personal and organizational values with those that serve client, shareholder and societal needs. Aspiring to adopt these values will create more resilient firms and a stronger future for finance.