The importance of ethical practice in the financial services industry Essay
My production has been seen by a financial services recruitment agency, Taylor Green. They were most impressed with the quality of my production. Taylor Green wants me to produce some materials for them. I will produce a careers folder for them to use, explaining the importance of ethical practice in the financial services industry.
Businesses who provide financial services have a duty of care towards their customers. They must make sure they are completely honest when selling products to their customers. They need to make sure they provide all details of products, what it is, how it works the benefits and also the risks; they cannot force products upon the customers. They should also not be supporting any business that is working in an unethical way. For instance, dealing with arms exporters and tobacco manufactures. In places where tobacco is made, many of the conditions are poor and the employers treat their staff unfairly and therefore is unethical. All businesses should operate in repressive regimes and refrain from businesses conducting animal testing.
Testing on animals to make a profit is unethical and should not be done, whereas testing on animals to find life-threatening diseases can be accepted. Similarly, businesses with a poor
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All businesses and individuals have a social responsibility in regards to the paying of tax. No business or person should avoid or evade the payment of taxes as it is unethical. Tax avoidance is the use of legal methods to modify an individual’s financial situation in order to lower the amount of income tax owed. Tax evasion is an illegal practice where a person, organisation or corporation intentionally avoids paying tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties.
This can happen especially with Location Optimal Commerce on the Internet (LOCI). This is where people buy products online and pay lower Value Added Tax (VAT). In a result they pay lower tax and avoid paying UK VAT which is the highest at 20%. Furthermore, they also have businesses also have a social responsibility to question any financial activity. If large sums of money enter an individual’s account, then it’s a duty for the bank to ask questions on where this money came from. This can then prevent money laundering which is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.
Moreover, it’s important that organisations have employer, employee relations. Businesses have a duty to make sure that all staff are treated equally irrespective of their age, gender, ethnicity or religion. Similarly, there shouldn’t not be discriminatory pay. All staff must be paid the same even whether they are male or female. They also cannot pay below the minimum wage. Additionally, there should also be recognition of trade unions. All staff members are allowed to be in a trade union to protect them; the business cannot prevent them from joining and must also negotiate with the unions on topics such as salary and working conditions. Additionally, the businesses should always invest in training. They have a duty to make sure that all staff are well trained such as new software, technology or programs to ensure that all staff have confidence that they know what they are doing in work. Lastly, businesses should always be open with all employees; they must know all the problems for example, if they are making people redundant they must know that.
In conclusion, all businesses that operate in the financial industry have a duty of care and many social responsibilities in order to be ethical.