Ethics and Regulation in the Professional Asset Management Industry
Asset management is an operation that involves the diligent management of the investor's funds in a professional way. The asset manager thus is an agent hired to do the job on account of his or her peculiar financial ability. Professional firms that are into asset management thus have duties not only to the investors, but also to the stock market, the financial and government bodies in keeping their activities above board. The managers are often entrusted with the task of dealing with billions of dollars or assets of like proportions. It is when dealing with such a huge cash flow that there comes the problem of ethical dilemmas. The unethical models of behavior has brought forth many regulations and guidelines that have been issued by the government and the financial agencies -- these form the laws and other than that the managers are obliged to follow an ethical code of conduct that form a part of the ethical standards. The manager shall thus adopt standards that are highly mindful of the interests of the investor. (Reilly; Brown, 2011)
Some of the laws that have been passed to regulate the industry include the 'Employee Retirement Income Security Act -- ERISA' for retirement asset managers and fiduciaries, 'Pension Protection Act of 2006' for pension fund sponsors and managers, and the securities laws for the asset management industry which began with the Securities Act of 1933 and the Securities Exchange Act of 1934 and many other acts like the Investment Company Act of 1940 and especially the Investment Adviser...
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