Defining Professionalism: The Eight Ethics Principles

As the realm of investments witnesses a significant shift towards 'alternatives' becoming mainstream, it becomes imperative for the CAIA Association to take a leadership role in developing a modernized and relevant set of fiduciary practices for investment professionals and capital allocators to embrace.


We invite all stakeholders to join us on this transformative journey, recognizing the need for principles that not only align with the industry's current trajectory but also lay the groundwork for a sustainable and responsible future for alternative investments.

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* Please identify which stakeholder group you belong.

Please provide your comments, thoughts, ideas for each of Ethics Principles listed below:

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* 1. Ethical and Professional Behavior
The firm and its professionals embrace and promote a culture in which ethical and professional behavior is encouraged, respected, and celebrated. This creates an environment where it is easy for individuals to act ethically and professionally. An ethical and professional mindset recognizes that investment decisions and behaviors have wider implications (‘public responsibility’). It therefore seeks to create outcomes that reflect favorably on the firm as a whole and shows concern for wider stakeholders in their actions –notably society as a whole.

In action:
Professionals should act ethically.
  • Act ethically
  • Be concerned for well-being
  • Take personal responsibility
  • Advocate for the industry
  • Act professionally with integrity
  • Voice concerns
  • Show responsibility to stakeholders
Provide your comment here:

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* 2. Partnership
The firm and its professionals align themselves with the client and act as a peer and partner. The firm recognizes that its specialist skills are not a source of advantage or superiority over clients but are a critical contribution to the success of the client’s mission. Partnership is a commitment to deep trust, good empathy, and the building of strong relationships over the long term through honest conversations over realistic expectations and the resolution of issues.

In action:
Professionals should play their part in building trusting relationships with clients.
  • Know your client
  • Embrace opportunities for co-creation
  • Seek alignment of values
  • Communicate
  • Operate with alignment of interest
Provide your comment here:

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* 3. Clients First
Putting the client first is knowing your client, understanding their needs (principle 2), and then making decisions in the best interest of meeting those needs. It is about strong loyalty to the client and being purpose-driven, both of which act to enhance alignment.

In action:
Professionals should put clients’ interests first.
  • Operate with client first principle
  • Manage conflicts within multiple products
  • Support governance and culture
  • Avoid conflicts of interest
Provide your comment here:

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* 4. High Standards of Conduct
These values will permeate all aspects of the professional lives of individuals and their firms. In particular, we highlight the communications with all stakeholders (including clients, employees and colleagues, investee companies, regulators and so on) should be transparent, accurate and authentic.

In action:
Professionals should demonstrate the values of transparency, integrity, and accountability.
  • Be transparent and set goals
  • Disclose costs
  • Take accountability
  • Disclosure of errors
  • Act with integrity
  • Support ethical cultural values
Provide your comment here:

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* 5. High Standards of Practice
Complying with precisely specified investment content skills and practice, built on a strong evidence base and rigorous thinking, in line with industry theory and best practices.

In action:
Professionals adhere to a best practice standard.
  • Clearly define standards of practice
  • Seek professional accreditation
  • Clearly define competencies and body of knowledge
  • Work within an appropriate rewards system
  • Operate under an ethical framework
Provide your comment here:

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* 6. Professional Work
This relates to the quality of research and due diligence performed, the scope of thinking adopted and involves the significant and continued engagement with client context. The application of expertise in understanding risk must be front and center in the professional skillset. This understanding is holistic and covers the multiple strands that affect all relevant risks and outcomes.

In action:
Professionals are diligent, competent, and objective throughout the investment process. They judge risks holistically and comprehensively.
  • Comply with applicable laws
  • Ensure appropriate risk assumptions and models
  • Ensure sufficient documentation
  • Show professional work
  • Operate within a judgement framework
  • Behave appropriately under stress
Provide your comment here:

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* 7. Continued Learning
This suggests individuals that are quick to adapt to new content and context and are good with change and continuous development. The principles of self-learning and self-improving are factors in this.

In action:
Professionals strive to continue to learn and grow their knowledge base.

  • Seek continuous education
  • Understand the impact of technology
  • Embrace humility and curiosity as key attitudes
  • Apply growth mindset principles
  • Undertake adjacent learning
Provide your comment here:

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* 8. Collaboration
Benefits accrue from processes that include peer review, applying diversity in knowledge, thinking and perspectives to improve the accuracy and insight of client advice and communications. Working with other investors can also be value-added in certain situations where collective action approaches are legitimate.

In action:

Professionals strive to continue to learn and grow their knowledge base.

  • Utilize peer review in your work
  • Support the investment ecosystem
  • Value diversify of thought, teamwork, and collaboration
  • Seek peer review in your ethics code
  • Support the professional community
Provide your comment here:

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* Are there any additional thoughts you’d like to share? We value any further comments you may have.

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* Can we reach out to you to learn more about your comments? If so, please share your name and contact information.