Hedge fund managers and corporate boards received low marks with regard to ethical behavior in a recent survey of financial-industry professionals.
The CFA Institute yesterday released the
Financial Market Integrity Index illustrating “soured sentiment and shaken faith” among financial professionals regarding the ability of current U.S. investor protections to ensure an orderly functioning of the equity markets.
In the ethical-behavior category, the perception of
hedge fund managers was lowest overall, with pension fund managers earning the top-rated spot.
More than 2,000 investment professionals participated in the research by taking the survey either online or via telephone interview in February and March.
According to the report that accompanied the survey findings, respondents generally consider corporate boards and corporate executives to be most responsible for the current financial crisis.
The Financial Market Integrity Index is designed to gauge chartered financial analysts’ perceptions of the state of ethics and integrity in different markets around the world.
Based on their perception of market ethics and integrity alone, only 49% (versus 68% a year ago) of U.S.-based respondents were likely to recommend investing in U.S. markets.
Those outside the United States also appear to have lost faith in the U.S. market systems, according to the finding.
In last year’s survey, those outside the United States rated regulatory and investor protections higher than did those inside the country, but this perspective was reversed in the 2009 survey findings.
“It is clear that CFA charter holders have lost confidence in some financial professionals and market protections in the United States over the last year,” Matthew Orsagh, project manager for the FMI, said in a statement.
“These findings mirror the results we see in other markets surveyed, although there are unique concerns shown in each market,” he added.
“In the United States, our members signaled the greatest need for improvement in the U.S. regulatory system and the ethical behavior of corporate directors and executives.”
The CFA Institute is a Charlottesville, Va.-based association responsible for the CFA designation in more than 100 countries.
