Professional ethics and integrity: honesty, fair dealing, confidentiality, competence and CPD
Why ethics is examined
Ethics questions test whether you can recognise a conflict between commercial pressure and the client's interest, and whether you know the concrete rules - confidentiality, competence, CPD - that turn values into obligations.
Core duties
- Honesty and integrity: no misrepresentation, no forged signatures, no backdating, no withholding adverse information.
- Fair dealing: the client's interest comes before your commission; where interests cannot be reconciled, decline the business.
- Confidentiality: personal data is protected by the Personal Data (Privacy) Ordinance (Cap. 486) - collect only what is needed, use it for the purpose collected, keep it secure, and do not share it without consent or another legal basis.
- Competence: advise only within your knowledge; refer complex cases (tax, trusts, cross-border) to qualified specialists.
- Respect for the law and the regulator: cooperate openly with the IA.
Confidentiality in practice
Client lists, policy details and medical information belong to the client relationship, not to the individual adviser. Moving to a new firm does not entitle you to take or use client data; consent or another lawful basis is needed. Confidentiality survives the end of the relationship and the end of employment.
Continuing professional development
CPD is a licence condition: 15 hours per CPD year, including at least 3 hours on ethics, with the remainder relevant to the regulated activities, recorded so the IA can verify it on request. CPD is not box-ticking; a gap in technical knowledge is a competence issue, not just an administrative one.
Gifts and inducements
The Prevention of Bribery Ordinance (Cap. 201) makes it an offence to offer or accept an advantage in connection with business. Follow the firm's gift and hospitality policy, record what is accepted, and refuse anything that could influence advice.
Worked example
An adviser leaves an agency for a broker and emails himself the agency's client list, then markets to those clients. This breaches confidence and the PDPO, may breach his agency agreement, and is a fit-and-proper issue the IA can weigh when he applies for or renews a licence. The lawful route is to obtain client consent or follow an agreed protocol.
Traps
- Believing confidentiality ends when the client leaves or the adviser resigns.
- Treating CPD hours as optional in a busy year, or assuming they carry over freely.
- Thinking a client's blanket consent cures every subsequent use of data.
- Accepting “small” gifts without recording them.