Home Breadcrumb caret Industry News Breadcrumb caret Industry CFA members worry about unethical behaviour in wake of Covid-19 Survey respondents are also concerned the pandemic could cause asset mispricing By Staff | June 23, 2020 | Last updated on June 23, 2020 2 min read © rawpixel / 123RF Stock Photo Almost half of investment managers in Canada believe the Covid-19 crisis will lead to unethical behaviour in the investment management industry, according to a global survey from the CFA Institute. The survey found that 45% of Canadian CFA members said they were worried about an increase in unethical behaviour in the wake of the pandemic, while 26% were not. Twenty-nine per cent were neutral on whether Covid-19 would lead to a surge in misconduct. “Of note, a majority thought that regulation of market conduct should not be relaxed in this crisis, which is a positive reflection of the ethical professionalism of the membership,” Olivier Fines, the CFA Institute’s head of advocacy for Europe, the Middle East and Africa, said in a release. More than half of Canadian respondents said conduct regulation should not be relaxed to encourage trading and liquidity, and 71% said regulators should consult industry on how to respond to the pandemic. Market liquidity was a concern for many respondents, particularly with regard to investment-grade corporate bonds. In Canada, 35% of respondents said they thought liquidity was down in corporate bonds, due in large part to central bank intervention. Only 30% of Canadian respondents thought liquidity had dropped in equity markets. An overwhelming majority of respondents — 96% — said they thought Covid-19 would lead to asset mispricing, driven predominantly by liquidity dislocation (36%) and a distortion of market pricing due to government intervention (35%). The majority of Canadian investment managers (almost 77%) said they were taking a wait-and-see approach before making changes to their strategic asset allocation. The remaining 23% said they have already made significant changes to their allocations. The CFA Institute polled 13,278 of its members around the world between April 14 – 24, 2020. The results of the survey have a margin of error of +/-0.8%. Staff The staff of Advisor.ca have been covering news for financial advisors since 1998. Save Stroke 1 Print Group 8 Share LI logo