With the passing of Baroness Thatcher last month, Britain took a step back to reflect on the pros and cons of the Iron Lady's vast political and economic legacy - one aspect of which was the deregulation of the financial services industry. The conversation felt particularly relevant to those of us involved in the industry given the ongoing debate over regulatory reforms that are now being enacted by governments around the world.
Taking the UK as just one of many examples, the financial sector here has seen significant regulatory changes in the years since the global economic crisis of 2008. Just last month, a new "tripartite" regulatory regime was introduced; next month, an influential Parliamentary Commission will report on culture and standards across the banking sector, with further legislative recommendations likely. Taken together, these are tentative steps towards what should be a major transformation of an industry that employs over 2 million people and is the single biggest contributor to the UK economy.
Perhaps more importantly, though, these changes reflect policymakers' lack of trust that the industry will truly commit to implementing change from within. The public, and those who represent its interests, simply don't believe that financial organisations are willing to take the necessary steps to ensure that the industry's reputation is restored and that future crises are avoided.
At CFA Institute, we want to help the industry prove that belief wrong. We believe that everyone has a part to play in restoring trust and raising standards - which is why we are launching the Claritas Investment Certificate this week at our annual global conference in Singapore.
The Claritas certificate will help everyone working alongside investment decision makers to take positive action to demonstrate his or her commitment to improving standards of knowledge and trust across the industry.
This is in response to a call from the industry for an overview of the fundamentals of the investment industry for those who work alongside investment decision-makers. The programme is designed to give everyone working in financial services a clear understanding of his or her professional role and responsibilities, and how they contribute to the industry as a whole.
In many ways, this is an exercise of necessity. Financial services professionals are recognising that restoring consumer and market confidence and generating revenue streams should go hand in hand--organizational profitability should be directly aligned with meeting client objectives. Meanwhile, the reputation of established financial centres will be challenged by new markets as the global economy's centre of gravity continues to sway eastwards. And it is those markets and organisations that take visible action to enhance their integrity and reputation that will succeed in the long-term.
Revolutionizing the culture of companies, rather than enacting new regulatory reform, is the key to restoring trust in global financial services markets. Seeking to assign praise or blame to others' past behaviour is an important part of the healing dialogue but it will not define the future of finance. The path towards addressing these problems will be a long one, and we won't be able to rely on any small fix alone. But we must all do our part---change must start with each one of us. If that's the case, financial services companies and individuals can look back on 2013 as a turning point for something much more important than new regulation.